Gold surged to a fresh record high this morning, surpassing the previous record hit just yesterday, after US President Donald Trump announced “permanent” 25% tariffs on auto imports, intensifying trade tensions. Trump’s unpredictable trade policy has been the key driver for gold so far in 2025, with prices up by more than 16% year-to-date, extending its momentum from 2024. We see uncertainty over trade and tariffs, along with central bank buying and inflows into ETF holdings continuing to buoy gold prices.
Meanwhile, copper has continued to retreat from its nine-month high as expectations for the ex-US tightness are retreating following reports earlier this week that US tariffs on copper imports could be imposed within weeks, not months.
Tariffs are bearish for copper and other industrial metals in the context of slowing growth and keeping inflation higher for longer. If US inflation remains persistent or rebounds, it could prompt the Federal Reserve to delay or increase interest rate cuts. With growth in the US likely to slow on the back of tariffs and China already struggling to revive its economy, demand for copper and other industrial metals is likely to weaken looking ahead.