Gold endured a volatile few hours’ trading — rallying to a record, then paring gains — after President Donald Trump imposed tariffs on US steel and aluminum imports, adding to uncertainty in global markets.
Bullion set a fresh peak above $2,942 an ounce, before retracing some of that advance. Trump said on Monday that the latest round of levies, which go into effect in March, would bolster domestic production and bring more jobs to the US. He also warned the tariffs “may go higher.”
The precious metal has surged about 11% this year, setting successive records, as Trump’s disruptive moves on trade and geopolitics reinforce its role as a store of value in uncertain times. Traders are also trying to get a read on the potential implications for the US economy and monetary policy should the White House’s policies reignite inflation and subdue growth.
Investors will be focused on Federal Reserve Chair Jerome Powell’s testimony before Congress on Tuesday and Wednesday for clues about monetary policy. Short-term US inflation expectations have risen above longer-term ones to the widest since 2023. That may support the case for a slower pace of easing, a scenario that could be bearish for bullion as it pays no interest.
Gold’s ascent has been accompanied by inflows into bullion-backed exchange-traded funds. Global holdings have risen for six of the past seven weeks, hitting the highest since November, according to a Bloomberg tally.
Banks have forecast that a test of $3,000 an ounce is in the offing. Among them, Citigroup Inc. said last week it expected gold to hit that level within three months, with geopolitical tensions and trade wars boosting demand. At J. P. Morgan Private Bank, the year-end target is $3,150 an ounce, according to Global Market Strategist Yuxuan Tang.
“Until we see clarity on the US policies, both trade-related and economic, it will create an environment for increased levels of gold volatility,” said Joseph Cavatoni, senior market strategist for North America at the producer-funded World Gold Council. “So, while we might see a $3,000 gold price, we expect there could be ongoing movements that bring us back below.”
Spot gold was up 0.7% at $2,928.36 an ounce at 2:10 p.m. in Singapore, after rising to as high as $2,942.68. Among other precious metals, silver and platinum were flat, while palladium edged higher. The Bloomberg Dollar Spot Index was steady after climbing on Monday.
Some market metrics suggest that bullion’s surge may be overdone, signaling that a pause may be due. Gold’s 14-day relative-strength index — a gauge of the pace and intensity of moves — had approached 80, far above the level of 70 that some analysts regard as overbought.
The precious metal’s gains have boosted producers’ shares. In Hong Kong, Zijin Mining Group Co. spiked by more than 4% to hit the highest level since November, while in Australia, Northern Star Resources Ltd. touched a record, up by about a fifth this year.
Elsewhere, China’s central bank expanded its gold reserves for a third month in January, signaling ongoing commitment to diversify holdings even with prices at historic highs. Asia’s largest economy also announced a pilot program to allow 10 major insurers to invest as much as 1% of their assets in bullion for the first time. That could translate into a potential 200 billion yuan ($27.4 billion) of funds, according to Minsheng Securities Co.
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