The announcement of 25% tariffs on Canada and Mexico by President Trump has injected a fresh wave of uncertainty into the markets, particularly affecting sectors reliant on cross-border trade. US automakers are facing potential profitability challenges as the increased trade costs could disrupt supply chains and raise production expenses. Meanwhile, the Bloomberg Dollar Index has strengthened against the Mexican peso and Canadian dollar, reflecting the anticipated economic pressures on these countries due to the tariffs.
In this climate of heightened economic tension, gold has reached all-time highs, underscoring its status as a safe-haven asset. Investors are flocking to gold amidst the geopolitical uncertainties, while resilient consumer spending and lower-than-expected jobless claims suggest that the US economy remains stable. This stability may lead the Federal Reserve to maintain its current interest rate levels for an extended period.
The SPDR Gold Shares ETF (GLD), which aims to track the price of gold bullion, is currently trading at $257.95 as of 16:01 on January 30, nearing its 52-week high of $258.29. This reflects the increased demand for gold as investors seek refuge from market volatility and geopolitical tensions.