Gold prices retreated from record highs on Monday as the U.S. dollar strengthened following U.S. President Donald Trump’s announcement of sweeping tariffs on Canada, Mexico, and China.
By 4:05 pm AEDT (5:05 am GMT) spot gold was down $17.97 or 0.6% to US$2,780.08.
On Saturday, the U.S. confirmed plans to impose 25% tariffs on imports from Canada and Mexico, while China would face a 10% levy. Canadian energy exports to the US will be subject to a 10% tariff.
The tariffs are set to take effect on Tuesday, prompting retaliatory measures from the affected countries.
The announcement bolstered the U.S. dollar, weighing on gold, which is priced in the currency. However, analysts remain optimistic about gold’s long-term outlook.
In a note to clients, ANZ analysts stated, “We maintain our bullish stance on gold, with prices expected to reach a record high of USD2,900/oz in 2025. Strong investment inflows, resilient physical demand, and elevated central bank purchases will keep gold on a strong footing.”
Despite near-term pressure from a stronger dollar, gold continues to find support from expectations of a Federal Reserve rate-cutting cycle, safe-haven demand amid global economic uncertainty, and robust central bank buying. These factors may help sustain the precious metal’s appeal even as geopolitical tensions and economic policy shifts impact financial markets.
