Market News

Gold prices have rallied to fresh highs as trade tensions have escalated, pushing nearer to the $3,000 per ounce mark.

Over the weekend, US president Donald Trump said that he would formally announce plans on Monday to impose a 25% tariffs on all steel and aluminium imports into the US and that these new levies would be in addition to existing duties on metals.

The spot gold price hit a fresh high of over $2,908 per ounce on Monday, while gold futures (GC=F) also rallied to a new record of over $2,937 per ounce during the session.

Trump had already announced plans to put 25% tariffs on imports from Canada and Mexico but agreed to delay imposing the levies at the last minute.

However, the president did go ahead with slapping a 10% tariff on imports from China, to which Beijing responded with its own duties on US goods.

The escalation in tensions have added to fears of an all-out trade war that could stoke inflation.

Gold tends to perform well in times of geopolitical uncertainty and higher inflation, as it is considered to acts as a hedge against price growth pressures.

Ewa Manthey, commodities strategist at ING, said on Thursday her team believe that prices will "likely to reach the $3,000/oz level this quarter".

However, they believed the precious metal would average at $2,760 per ounce this year.