Gold prices rose to a record high on Wednesday on safe-haven demand following U.S. President Donald Trump’s latest tariff threats, while investors awaited minutes of the Federal Reserve’s January policy meeting.
Spot gold surged to an all-time high of $2,946.85/oz earlier in the session and was last down 0.2 per cent at $2,928.88 as the dollar crept higher as of 12:17 pm ET (1714 GMT).
A weaker dollar makes bullion more expensive for buyers holding other currencies.
U.S. gold futures fell 0.1 per cent to $2,945.50.
“We are in a state of unusual-heightened uncertainty... the catalyst is the tariffs and trade talks or threats that are going on around the world,” which is supporting the prices, said Paul Wong, market strategist at Sprott Asset Management.
Trump said on Tuesday that he intends to impose auto tariffs “in the neighborhood of 25 per cent,” along with similar duties on semiconductor and pharmaceutical imports.
This follows his recent move to impose a 10 per cent tariff on Chinese imports and a 25 per cent tariff on steel and aluminum earlier this month.
Bullion is seen as a safeguard against geopolitical risks and inflation, but rising interest rates diminish its attractiveness as a non-yielding asset.
Fed officials remain uncertain about the impact tariffs might have on inflation.
Traders currently see at least one 25-basis-point rate cut and a 44 per cent chance of an additional lowering by December, according to LSEG data.
Investors will analyze the minutes from the U.S. central bank’s January policy meeting due later in the day, for clues on the Fed’s rate trajectory.
Among other metals, spot silver, used in electrical components, shed 0.7 per cent to $32.64 an ounce, which aims to challenge a 10-year high.
Platinum declined 2.1 per cent to $966.65 and palladium eased 1.9 per cent to $968.43.
“Although the imposition of tariffs could hurt silver’s industrial demand, it could still push higher from a valuation perspective,” said Han Tan, Exinity Group chief market analyst.