Gold hits record high as investors flock to safe-haven amid tariff war

Gold prices regained an all-time high on Tuesday, driven by investors seeking the safe-haven asset after China retaliated with tariffs on the US in response to President Donald Trump’s tariffs.

Spot gold gained 1.1% to USD 2,844.56 per ounce as of 01:40 p.m. ET (1840 GMT), after hitting a record high of USD 2,845.14 earlier in the session.

US gold futures settled 0.7% higher at USD 2,875.80.

“The tariff news came out like it did overnight; I think right now that’s the main driver than any other thing and data that comes out today, (but) I think it’s going to be overshadowed by the tariff news,” said Bob Haberkorn, senior market strategist at RJO Futures.

“The dollar was strong going into the week here, but with a lower dollar, that also definitely helps the price of gold,” Haberkorn said.

The dollar fell 0.9%, making gold less expensive for other currency holders.

China imposed tariffs on US imports, swiftly responding to new US duties, escalating the trade war between the world’s top two economies even as Trump offered reprieves to Mexico and Canada.

The Trump administration’s plans for trade tariffs come with inflation risks, three Fed officials warned on Monday, with one arguing that uncertainty over the outlook for prices calls for slower interest rate cuts than otherwise.

Data showed US job openings in December fell to 7.6 million, falling short of the consensus estimate of 8 million, indicating potential economic slowdown.

Bullion is traditionally considered a hedge against both inflation and geopolitical uncertainty, but higher rates reduce the non-yielding asset’s appeal.

Given the disruptive nature of the current US administration creating market uncertainty, coupled with central banks possibly increasing gold purchases to diversify from US dollar holdings, gold prices could reach USD 3,000 this year, said Jim Wyckoff, a senior market analyst at Kitco Metals.

Investors’ focus now turns to the ADP employment report on Wednesday, the payrolls report on Friday, and speeches from several Fed officials.

Spot silver rose 2.5% to USD 32.33 per ounce. Platinum gained 0.4% to USD 967.94, and palladium fell 1.3% to USD 994.

(Reporting by Anmol Choubey in Bengaluru; Editing by Tasim Zahid, Nick Zieminski, and Mohammed Safi Shamsi)