【MACRO Alert】Trump's tariff storm caused turmoil in global markets, and gold prices soared to a reco

After US President Trump announced a new tariff plan, global markets were once again in a state of tension. Investors flocked to safe-haven assets, pushing gold prices to a record high. This article will explore the impact of Trump's tariff policy on the gold market and the reactions of global investors.

Trump said last Sunday that he would announce a new 25% tariff on all steel and aluminum imported into the United States on Monday local time. This will be built on top of existing metal tariffs and represent another major escalation in his trade policy reforms. He also said he plans to announce reciprocal tariffs on Tuesday or Wednesday and have them take effect immediately.

"Gold prices remain in a sweet spot with little to hold them back," Westpac analyst Richard Franulovich said in a note. "The inherently unpredictable and disruptive Trump has threatened tariffs on allies and adversaries alike, as well as slapping 100% tariffs on BRICS countries if they diversify away from the dollar, all of which suggests that gold's safe-haven appeal will improve."

Affected by market turmoil, spot gold hit a new record high on Monday, reaching the $2,900 mark, and spot silver followed the rise in gold, standing at $32/ounce. The intraday gains of gold and silver were both more than 1%. On Tuesday, gold rose even more wildly, with spot gold rising straight up to $2,920/ounce, setting a new record high. Since the beginning of 2025, the highest increase in spot gold prices has exceeded 11%. COMEX gold futures have also repeatedly broken through historical highs. As of press time, COMEX gold futures have also risen straight up to $2,945/ounce.

Surging global demand for gold, especially in China, has provided significant support for gold prices. Last Friday, according to official reserve asset data updated on the People's Bank of China's official website, as of the end of January 2025, my country's central bank gold reserves were 73.45 million ounces, an increase of 160,000 ounces from the previous month, marking the third consecutive month of increase.

In the international commodity market, gold and copper are flowing into the United States at an accelerated pace. In terms of gold, the price difference between New York futures and London spot has widened to twice that of the second half of 2024. Due to vigilance against US President Trump's tariff policy, the phenomenon of "one product, two prices" has emerged, with prominent US prices.

Gold futures on the New York Mercantile Exchange (COMEX) reached $2,872 per ounce on February 3, setting a new record high and gradually approaching the $3,000 mark. When the economic and international situation is uncertain, gold is easily bought as a "safe asset." Despite this, the rise in the New York market is particularly prominent.

The widening of the price gap is symbolic. From October to November 2024, the maximum price difference between New York futures and London spot was only about $20 per ounce. Starting from December, the price gap widened, and by January 20, 2025, New York futures were about $40 higher.

The market pointed out that they are wary of the Trump administration's import tariffs. Although it is difficult to judge whether gold is targeted, it is said that there is an increase in buyers who want to purchase as soon as possible through futures. Tsutomu Kosuge, a representative of Japan MarketEdge, said: "The fear of tariffs is also increasing in the gold market."

As of February 3, the certified stocks of the New York Mercantile Exchange totaled 32.29 million ounces (about 1,004 tons), an increase of about 90% compared with the end of October 2024. This is the highest level since July 2022, a year and a half later.

In the nonferrous metals industry, which is closely related to industry, the sense of crisis about tariffs is even more prominent. The price difference between copper futures on the New York Mercantile Exchange and three-month futures on the London Metal Exchange (LME) reached nearly $600 per ton on January 16, before Trump took office, expanding to about eight times the level at the beginning of the year.

Trump said on January 27: "Tariffs will also be imposed on military necessities such as steel, aluminum and copper." Goldman Sachs said in a report on January 20 that "the United States relies on imported copper" and warned that if tariffs are initiated, "in order to attract sufficient imports, it will be necessary for the U.S. copper price to reflect the full tariff."

At this stage, it is foreseeable that global trade tensions will continue, pushing gold prices to the $2,900 to $ 2,920 level in the short term. Unless the uncertainty of tariff policy is eliminated, the market "distortion" will continue. Investors should pay close attention to further moves of the Trump administration and the reaction of global markets.