Gold Retreats from Record Highs as Dollar Soars on Trump Tariffs

Gold prices fell on Monday, pulling back from record highs as the U.S. dollar surged following President Donald Trump’s new trade tariffs on China, Canada, and Mexico.

Market Reaction:

• Spot gold dropped 0.7% to $2,780.56 per ounce
• Gold futures (April contract) declined 0.8% to $2,810.30 per ounce
• Spot gold had hit a record high of $2,817.57 last week

Why Did Gold Drop?

• Stronger U.S. dollar: The greenback surged to a near one-month high, nearing its highest level in over two years, pressuring commodities priced in dollars
• Inflation fears: Trump’s tariffs (25% on Canada & Mexico, 10% on China) could fuel higher U.S. inflation, reducing the likelihood of aggressive Federal Reserve rate cuts, a key driver for gold

Broader Metal Market Impact:

• Silver futures fell 1.5% to $31.795 per ounce
• Platinum futures declined 1.9% to $1,024.0 per ounce
• Copper futures dropped 1.1% to $8,944.25 per ton, pressured by weak Chinese PMI data

JPMorgan’s Bullish Gold Outlook

Despite the pullback, JPMorgan reiterated its bullish view, forecasting:

• Gold at $3,000 per ounce by late 2025
• Lower U.S. interest rates and a stabilizing economy to drive demand
• JPMorgan will deliver $4 billion worth of gold against futures contracts in February

Looking Ahead:

While short-term pressure from the strong dollar remains, ongoing economic uncertainty and risk aversion could keep gold demand resilient in the long run. Traders will closely watch Fed rate expectations and further trade tensions for market direction.