Gold Surges Amid Uncertainty Over US Tariff Proposals

Gold soared to its highest level in almost three months, driven by market uncertainty surrounding US President Donald Trump’s policy plans. Experts stressed that the lack of clarity has intensified concerns about market volatility, boosting the demand for safe-haven assets.

On Jan. 22, spot gold rose 0.6% to US$2,759.51/oz, just US$30 below the record high set last year. US gold futures also increased 0.4% to US$2,771.20/oz in New York trading. Earlier in the session, gold peaked at US$2,762/oz, extending to a 1.4% rally from the previous day after Trump’s remarks about tariffs. At the time of writing, gold is valued at US$2,755.7/oz. 

On Jan. 20, Trump unveiled plans to impose a 25% import duty on goods from Canada and Mexico starting Feb. 1. The tariff threats were later extended to China and the European Union. Experts emphasized that Trump's limited details have left investors uncertain about the scope and potential economic impact of the measures. “There is significant uncertainty surrounding the proposed tariffs and other policies, and gold tends to perform well in such conditions. It is a natural safe haven during periods of market instability,” said Ryan McIntyre, Senior Portfolio Manager, Sprott Asset Management.

Market participants are also evaluating the broader economic implications of the Trump administration’s policies, including tariffs and tax cuts, which could worsen US fiscal deficits and increase inflation. “Trump has been slightly less aggressive on tariffs than initially anticipated, which has provided some relief to markets. Lower or fewer tariffs reduce inflationary pressures, increasing the likelihood of further rate cuts,” explained Tai Wong, Independent Metals Trader.