Gold prices jumped to a record high on Monday as Donald Trump launched trade tariffs against Canada, Mexico and China.
The yellow metal peaked at $2,830.31 per ounce on Monday afternoon, as investors put money into the ‘safe-haven’ asset.
It had fallen back slightly to $2,821.04 an ounce at the time of writing.
The surge came after the US president confirmed the new tariffs, which will see Canadian and Mexican imports facing a 25 per cent levy, while Chinese goods will face fees of 10 per cent.
Tariffs on Mexico will be delayed for a month after Mexico’s President Sheinbaum reached a deal with Trump, but tariffs on Canada and China are still set to come into effect from Tuesday.
The S&P 500 dropped 1.8 per cent on the news, but is currently trading down 0.69 per cent.
In demand: Investors are buying gold as they look to hedge against geopolitical uncertainty
Hector McNeil, co-founder and co-chief executive of HANetf, said: ‘Gold’s rally towards a new record high is being driven by several factors.
‘Gold recently tipping over to all-time highs came on the back of Trump’s new tariffs on Mexico and Canada.
‘Markets are worried about a potential North American trade war. The steep, punishing tariffs on America’s two neighbours also raise concerns about Trump extending tariffs to other nations.’
Trump has also teased the imposition of tariffs on Europe, stating that the EU is and the UK are ‘out of line’, but has failed to elaborate on what tariffs could look like.
McNeil added that Trump’s call for lower interest rates has also boosted gold, partially as lower rates are generally positive for gold as returns from other assets are lower.
However, he said: ‘More broadly, a US president calling on the Fed to lower interest rates is highly unorthodox and is potentially leading some investors to worry that the central bank’s hard-won independence will be challenged under the new administration, bolstering the appeal of gold.
‘Persistent geopolitical and economic uncertainties, particularly around tariffs, continue to support gold’s appeal as a safe-haven asset. After a stellar performance in 2024, gold is showing the potential to maintain this momentum in 2025.’
Gold is often seen as a hedge against inflation and a way to store wealth during times of geopolitical upheaval and uncertainty.
Over 2024, gold soared more than 26 per cent in value, beating the S&P 500. The yellow metal is up almost 800 per cent since 2000.
