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Gold prices rose in Asian trading on Thursday, briefly hitting an all-time high as demand for safe-haven assets surged following U.S. President Donald Trump's threat to impose additional trade tariffs.

However, the rally in gold was capped by some strength in the U.S. dollar, which was bolstered by hawkish signals from the Federal Reserve's January meeting minutes.

Spot gold climbed 0.3% to $2,940.96 an ounce, briefly reaching a record high of $2,947.23 earlier in the session. Gold futures for April delivery rose 0.2% to $2,957.80 an ounce.

Trump's Tariff Threats Push Gold Prices Up

Trump’s announcement on Wednesday that he would impose 25% tariffs on automobiles, pharmaceuticals, and semiconductors within the next month fueled safe-haven demand. He also mentioned the possibility of imposing 25% tariffs on all lumber imports to the U.S.

These threats heightened concerns that escalating U.S. tariffs could disrupt global trade and reignite a trade war between the world's largest economies.

Although Trump has recently threatened reciprocal tariffs on key trading partners, he also suggested that a trade deal with China was still possible, despite his recent imposition of 10% tariffs on the country, which led to backlash from Beijing.

Trump’s trade policy uncertainties pressured risk-sensitive markets on Thursday, driving demand for safe-haven assets like gold and the yen. These concerns have been a major driver of gold’s recent gains.

Other Precious Metals Gain, But Struggle to Maintain Momentum

Other precious metals also saw gains but were still facing some losses this week. Platinum futures rose 0.2% to $992.70 an ounce, while silver futures advanced 0.9% to $33.353 an ounce. In industrial metals, copper prices gained as China, the top importer, kept its benchmark loan prime rate at record lows. Benchmark copper futures on the London Metal Exchange increased 0.7% to $9,507.30 per ton, while March copper futures rose 0.2% to $4.5785 per pound.

Dollar Strength and Fed Concerns Limit Gold's Gains

Gold’s brief surge to record highs was restrained by a stronger U.S. dollar and concerns over the Federal Reserve's stance on interest rates. 

The dollar gained some strength this week as several Fed officials reiterated their cautious outlook on cutting rates further, citing persistent inflation and resilience in the U.S. economy.

The minutes from the Fed’s January meeting, released Wednesday, also revealed policymakers’ concerns about the inflationary impact of Trump’s trade policies, which dampened gold’s gains.

Paraphrasing text from "Investing.com"all rights reserved by the original author