Gold prices fluctuated higher on Tuesday (February 11th), soaring over $30 to a new historical high of $2942.53 per ounce. Currently trading around $2921.24 per ounce, mainly driven by US President Trump's imposition of a 25% new tariff on imported steel and aluminum. This policy has intensified market concerns about inflation and the escalation of the trade war, prompting investors to flock to gold as a safe haven asset.

Trump's new tariffs: trade war risks and inflation concerns

On Monday local time, Trump announced a significant increase in import tariffs on steel and aluminum to 25% and the cancellation of all exceptions and exemptions. This move aims to protect domestic industries in the United States, but also significantly increases the risk of a multi line trade war. The market's concerns about global economic growth uncertainty, escalating trade wars, and inflationary pressures have driven gold prices to reach a new high for the eighth time this year.

Kyle Rodda, a financial market analyst, pointed out that "the risk of a global trade war is putting pressure on physical gold trading, driving financial markets to hold gold exposure, which can be broadly described as part of the de dollarization theme." He also mentioned that buyers are not price sensitive and dealers are working hard to ship gold to the United States to avoid potential tariff impacts.

Gold craze: Futures premium and $3000 milestone

Concerns about the import tariff plan have been reflected in the US futures market, where major futures contracts have a premium of approximately $26 over spot prices. This premium reflects the strong market expectation for US gold demand. The reignition of the gold boom has put the gold price on track to break through the important milestone of $3000.

Investors are waiting for the release of the US Consumer Price Index (CPI) and Producer Price Index (PPI) data later this week to further assess inflationary pressures. In addition, Federal Reserve Chairman Powell will testify in Congress on Tuesday and Wednesday, and his remarks may have a significant impact on the market.

Prior to Powell's speech, some bulls took profits, causing the gold price to sell off some of its gains. Earlier, it fell to around $2906, but was quickly supported by bargain hunting and safe haven buying, and is currently trading near the 2920 level.

Silver Performance: Limited Industrial Demand

Compared to the strong performance of gold, spot silver prices are currently down 0.3% to $31.92 per ounce. Lukman Otunuga, Senior Research Analyst at FXTM, said, "Although tariff concerns may support silver, Trump's tariffs could lead to a decrease in industrial demand, limiting silver's gains." Silver's industrial nature has made it relatively weak in the context of the trade war.

summary

Trump's new tariff policy not only exacerbates the risk of a trade war, but also raises market concerns about inflation and pushes gold prices to new highs. The position of gold as a safe haven asset has been further strengthened, and market expectations for breaking through the $3000 mark have risen. Meanwhile, silver has shown weakness due to limited industrial demand. In the future, the trend of the gold market will depend on the development of the trade war, the performance of inflation data, and the policy movements of the Federal Reserve.