Gold / Industry

Tariff Tsuris Drives Gold Price Past $2,800

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On Feb. 1, the spot price of gold reached a new milestone—$2,800 an ounce—as traders worried that President Trump’s new tariffs on Chinese imports and possible future levies for Canada and Mexico will reignite inflation.

At press time on Tuesday, gold’s spot price was $2,844 an ounce. It first crashed through the $2,800 mark Friday and remained above that level for most of Monday.

Jim Wyckoff, senior market analyst and strategist at Kitco, says the following factors have fueled the yellow metal’s ongoing surge: “trader/investor risk aversion and anxiety over potential trade tariffs and other disruptive policy moves by the Trump administration…increased central bank buying of gold for their sovereign reserves, especially from China, [and] bullish charts that are inviting the speculators to the long side of the gold market.”

In a recent research note, Bank of America analysts stated that “tariffs create a strong tailwind for gold.

“Not only because of their inherent inflationary effects but also as the USA’s increasingly hawkish foreign policy may accelerate de-dollarization plans,” the note said, according to Bloomberg.

Bob Haberkorn, senior market strategist at brokerage RJO Futures, told Reuters that tariffs were the “main driver” of gold’s rise, but said the weak dollar was contributing too.

Analysts have generally predicted 2025 will be another bullish year for gold. In its annual Precious Metals Forecast Survey, the London Bullion Market Association found that two-thirds of the analysts questioned believe the price of gold would climb past $3,000 an ounce in 2025. Overall, the market watchers predicted gold would average around $2,736.7 this year—a 14.7% increase above its average price in 2024.

“It’s safe to assume analysts are expecting yet another bumper year for gold,” the survey concluded.

So far, they have been proved right. The price of gold has risen 6.6% since Jan. 1, after notching a staggering 26% increase in 2024.

Last week, Trump said he’d impose a 25% duty on imports from Canada and Mexico and an additional 10% tariff on all goods from China. The tariffs on Canada and Mexico have been put on hold for at least 30 days; the Chinese tariff was implemented today and was met with a retaliatory levy on U.S. coal and gas, as well as an antimonopoly investigation of Google.

(Photo: Getty Images)

By: Rob Bates

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