Gold hit another record, with investors flocking to safe havens after US President Donald Trump reiterated threats to impose tariffs on Mexico and Canada.
Bullion topped $2,800 for the first time on Friday. The surge came after Trump said he would follow through on imposing 25% levies on imports from Canada and Mexico on Feb. 1. He also threatened China with measures, without specifying a level.
The precious metal, on track for its fifth consecutive weekly gain, has benefited from haven demand as Trump’s tariff threats spur fears of trade wars that could sap economic growth. There are also worries that his pledges to cut taxes and overhaul immigration may erode US finances and reignite inflation.
Federal Reserve Chair Jerome Powell said Wednesday that the US central bank was in “wait-and-see” mode with regard to the potential impact of the new administration’s policies.
The Federal Open Market Committee left interest rates unchanged this week as expected — after cuts at each of the three previous meetings since September — and indicated that stalled progress toward lower inflation warranted a patient approach.
The latest data on Friday showed the Fed’s preferred measure of underlying inflation remained muted in December and real incomes were soft, which should support further reductions in interest rates this year.
The so-called core personal consumption expenditures price index, which excludes food and energy items, rose 0.2% from November and 2.8% from a year earlier, according to Bureau of Economic Analysis data.
Spot gold added 0.5% to $2,809.16 an ounce as of 10:54 a.m. in New York. Silver fell, while platinum and palladium advanced.
