Gold Prices Rise Amid Tariff Threats, Potential Costs for Other Metals Increase

关税威胁下黄金价格上涨,其它金属的潜在成本也将上升
Published on: Jan 24, 2025
Author: Amy Liu

As traders weigh President Donald Trump’s latest tariff threats against Europe and his commitment to push for more interest rate cuts, gold prices continue to hover near their highest levels since last October.

Supported by safe-haven demand amid uncertainties in the global economic outlook, spot gold is trading close to $2,754 an ounce.

Trump stated that he intends to impose import taxes on Europe in an effort to bring manufacturing back to the U.S. Since taking office last Monday, he has identified China, the EU, Canada, and Mexico as potential targets for tariffs, raising concerns about how other governments might respond, which highlights gold’s appeal as a safe-haven asset.

Trump also mentioned that he would demand an immediate reduction in U.S. interest rates. While lower borrowing costs are generally favorable for precious metals, traders remain cautious since monetary policy is solely decided by the Federal Reserve. The Fed is expected to make a rate decision next week.

Last year, gold set a series of records, driven by the Fed’s shift toward cutting interest rates, geopolitical tensions, and central bank purchases. Traders are now also focusing on Trump’s domestic agenda, including his promises to cut taxes and reform immigration policies. Such measures could reignite inflation and complicate the Fed’s path of rate cuts.

Trump’s tariff policies may also increase potential costs for various metals. William Oplinger, CEO of American aluminum producer Alcoa, stated on Thursday (January 23) that the company might redirect its output from Australia to the U.S. if the U.S. imposes tariffs on Canadian imports.

Trump has threatened tariffs on several countries, including Canada and Mexico. Oplinger’s comments indicate that such tariffs could disrupt shipping flows, thereby increasing potential costs for consumers worldwide.

The company produces 2.2 million metric tons of aluminum annually, with 900,000 metric tons manufactured in Canada, most of which is exported to the United States.

Aluminum Gold Mining Precious Metals