Gold prices reached a new all-time high on Monday, driven by uncertainty in global financial markets following President Donald Trump's announcement of tariffs on imported steel and aluminum.
Spot gold traded at US$2,902 per troy ounce at 16.38 WIB, up 1.43% from the previous day's close, according to Bloomberg.
The precious metal has been on a record-breaking run, gaining 2.2% last week and 10.61% year-to-date.
Trump's latest trade threats have boosted demand for safe-haven assets. The president said on Sunday that a 25% levy would be imposed on steel and aluminum from all countries, but did not specify when the tariffs would take effect.
Richard Franulovich, an analyst at Westpac Banking Corp., noted that gold is well-positioned with few obstacles. "Trump's inherently unpredictable nature, launching tariff threats at allies and adversaries, alongside threats of 100% tariffs if BRIC nations diversify from the US dollar, all point to an increased attractiveness of gold as a safe haven," he said.
Traders will also be focusing on the testimony of Federal Reserve Chair Jerome Powell before Congress on Tuesday and Wednesday, which will provide insights into the future direction of US monetary policy. Powell is likely to highlight the strong economy as a key reason why central bank officials are in no rush to cut borrowing costs further, a scenario that would theoretically be detrimental to gold as it does not offer interest.
However, the metal's role as a store of value in uncertain times continues to attract investor interest. This is as markets try to gauge the potential implications for the US economy and monetary policy if the new administration's policies on trade and immigration reignite inflation and affect growth.
In addition, China's central bank expanded its gold reserves for the third consecutive month in January, signaling a continued commitment to diversifying holdings even as prices hit record highs.