Gold Holds Near Record High Amid Trade Tariff Uncertainty

Gold prices remained steady on Friday, hovering near record highs as safe-haven demand surged due to uncertainty surrounding U.S. tariffs and cautious sentiment ahead of key U.S. inflation data.

• Spot gold was unchanged after touching a record peak of $2,799.60 per ounce.
• Gold Futures (February) rose 0.1% to $2,793.74 per ounce by 01:55 ET (06:55 GMT).

Key Market Drivers

1. Trump’s Tariff Threats Fuel Safe-Haven Demand

• President Donald Trump reiterated plans to impose 25% tariffs on Canada and Mexico starting February 1.
• He also threatened steep tariffs on BRICS nations (Brazil, Russia, India, China, and South Africa), raising fears of a global trade conflict.
• Markets reacted with risk aversion, boosting gold’s appeal as a safe-haven asset.

2. Federal Reserve Policy & Inflation Data Awaited

• The Fed kept interest rates steady this week, with Chair Jerome Powell signaling no immediate rate cuts due to persistent inflation risks.
• Traders are now awaiting the U.S. December PCE price index, the Fed’s preferred inflation gauge, due later on Friday.
• A higher-than-expected PCE reading could delay rate cut expectations, potentially affecting gold’s momentum.

3. Precious Metals Mixed

• Silver Futures climbed 0.7% to $32.76 per ounce.
• Platinum Futures were flat at $1,027.80 per ounce.

Copper Falls on Proposed Tariffs & Weak China Demand

• Trump’s proposed tariffs on industrial metals—including steel, aluminum, and pharmaceuticals—added to concerns over global trade disruptions.
• Copper prices fell, extending losses amid weak Chinese demand and trade uncertainty:
  • London Metal Exchange Copper Futures dropped 0.5% to $9,080.65 per ton.
  • February Copper Futures edged 0.1% lower to $4.036 per pound.

Market Outlook

• Gold’s rally could extend if tariff tensions persist and inflation data supports safe-haven demand.
• Copper and industrial metals remain under pressure amid uncertain trade policies and weak manufacturing demand.
• The PCE inflation report will be a key catalyst for Fed policy expectations, which could impact gold’s direction in the near term.