Gold maintained its position near record highs on Tuesday, February 25, bolstered by safe-haven demand amid apprehensions regarding US President Donald Trump’s tariff proposals, which could potentially incite inflation and instigate a significant global trade conflict.
As of 0220 GMT, spot gold showed minimal fluctuation, priced at $2,950.39 per ounce, approximately $6 shy of the all-time peak of $2,956.15 achieved on Monday, February 24. US gold futures experienced a slight increase of 0.1 percent, reaching $2,967.40.
Market participants are beginning to reevaluate tariff-related risks as the extended deadline for tariffs on Mexico and Canada approaches next week, as noted by IG market strategist Yeap Jun Rong.
Trump reiterated on Monday that tariffs on imports from Canada and Mexico were “on time and on schedule,” despite ongoing initiatives by these nations to bolster border security and mitigate the influx of fentanyl into the US ahead of the March 4 deadline.
Furthermore, investors and economists expect the US Federal Reserve to react “strongly and systematically” to fluctuations in inflation and labor market conditions.
“This week’s roster of Fed policymakers may present some hawkish commentary, but with market expectations already factoring in a prolonged rate hold over the next two meetings, the effect on gold prices may be more subdued,” Yeap remarked.
Gold is regarded as a secure investment in times of economic and political instability and typically performs well in a low-interest-rate environment.
Investors are anticipating the release of the US Personal Consumption Expenditures report, the Federal Reserve’s preferred inflation gauge, which will offer insights into the potential trajectory for rate adjustments. This report is set to be published on Friday.
In the meantime, India’s gold imports are projected to plummet by 85 percent in February compared to the previous year, marking the lowest level in two decades due to reduced demand stemming from record bullion prices.
Spot silver increased by 0.3 percent to $32.45 per ounce. Platinum remained steady at $966, while palladium saw a decline of 0.4 percent.
