Gold Prices Decline Amid Dollar Strength Following Trump’s Tariff Warning
Gold prices dropped in Asian trading on Monday, weighed down by a stronger dollar after U.S. President-elect Donald Trump threatened to impose substantial tariffs on the BRICS nations.
The appeal of gold as a safe haven was further diminished by signs that the Israel-Hezbollah ceasefire was holding, though ongoing tensions between Russia and Ukraine maintained some interest in haven assets.
Spot gold fell 0.9% to $2,629.74 per ounce, while February gold futures declined 1.1% to $2,652.11 per ounce as of 23:07 ET (04:07 GMT).
Trump’s Tariff Threat Bolsters Dollar, Pressures Metals
Trump proposed “100% tariffs” on the BRICS bloc, cautioning them against moves to seek alternatives to the U.S. dollar.
This announcement weakened BRICS currencies and strengthened the dollar, as traders anticipated a surge in protectionist policies under Trump. Last week, Trump also threatened additional tariffs on China, Canada, and Mexico, raising fears of a potential global trade war.
The stronger dollar negatively impacted metal markets across the board. Concerns over sustained high inflation under Trump, which could lead to elevated interest rates, further unsettled metal markets.
Other precious metals also saw declines. Platinum futures dropped 0.7% to $945.90 per ounce, while silver futures slid 1.5% to $30.648 per ounce.
Copper Falls as Tariff Concerns and Strong Dollar Counter Positive China Data
Industrial metals followed a similar trend, with copper prices falling on Monday. Fears of additional U.S. tariffs and a robust dollar overshadowed encouraging economic signals from China, the world’s largest copper importer.
Copper Prices Decline Despite Positive Manufacturing Data from China
Benchmark copper futures on the London Metal Exchange dipped 0.5% to $8,976.50 per ton, while March copper futures fell 0.7% to $4.1145 per pound.
China, the world’s largest copper importer, reported stronger-than-expected growth in manufacturing activity for November, according to government and private purchasing managers index (PMI) data.
The improved PMI readings came as Beijing implemented a series of aggressive stimulus measures since late September to bolster economic growth.
Although these efforts showed some initial success, concerns persisted over potential economic challenges stemming from a trade conflict with the U.S.
Market participants are also awaiting additional stimulus announcements from two key political meetings scheduled for later in December.
