• US Tariffs Spark Gold Rally: The imposition of 25% tariffs on steel and aluminum imports by the US has driven gold prices above $2,900/oz
  • Record Gold Price: Gold prices reached a new record high of $2,917.9/oz on February 10, 2025, fueled by safe-haven demand and geopolitical uncertainty
  • Trade War Impact: The ongoing trade war has disrupted global supply chains, driven up inflation, and led to tighter monetary policies, further boosting demand for gold as a safe-haven asset

Harare- Gold prices reached a new record high of 2,917.90 per ounce on the 10th of February 2025, driven by the U.S. President’s trade war, which is targeting both allies and adversaries. This surge followed Donald Trump′s announcement of new 25% tariffs on steel and aluminum imports into the U.S., causing volatility in financial markets.

Since the beginning of the year, gold has appreciated by 10%.

Aluminum prices also experienced upward pressure, as market participants expressed concerns that the tariffs could disrupt supply chains and negatively impact economic growth, subsequently reducing demand for the metal.

The three-month aluminum contract on the London Metal Exchange rose by 0.3% to $2,635 per tonne.

Data from the American Iron and Steel Institute indicates that Canada, Brazil, Mexico, South Korea, and Vietnam are the largest exporters of steel to the U.S., with Canada serving as the principal supplier of imported aluminum.  

Consequently, U.S. manufacturers will face elevated costs due to the 25% tariffs, with import reliance estimated at approximately 40%-45% for aluminum and 12%-15% for steel.

This tariff conflict has exacerbated the already fragmented global economy, which is further burdened by Russia’s ongoing military actions in Ukraine and the protracted conflict in Gaza.

These geopolitical tensions have disrupted global supply chains, inflating commodity prices and contributing to rising inflation.

In response, central banks had implemented interest rate hikes to mitigate escalating inflation, although this has simultaneously constrained economic growth by limiting liquidity for investment.

With Trump’s return to the political forefront, he has proposed numerous tariffs targeting imports from China, Canada, Europe, and Russia, thereby intensifying the safe-haven demand for gold.

Following his announcement of new global tariffs on all steel and aluminum imports, fears of an escalating trade war have intensified. This move adds to pre-existing metal duties as part of his broader trade policy overhaul.

During his first term, Trump imposed tariffs of 25% on steel and 10% on aluminum but subsequently granted several trading partners duty-free exemptions, including Canada, Mexico, and Brazil.

Former President Joe Biden later negotiated duty-free quota arrangements with the United Kingdom, the European Union, and Japan.

However, it remains unclear from Trump's latest announcement what implications it will have for those exemptions and quota arrangements.

Equity Axis News