Gold hits record high as Trump announces tariffs on steel and aluminium
Gold has reached to a record high and aluminium prices rose after Donald Trump said he would impose new 25% tariffs on steel and aluminium imports into the US, rattling financial markets.
As investors rushed for a safe haven for their money, the spot price of gold rose by more than 1% to $2,896 (£2,336) an ounce on Monday morning, above the record high set on Friday. Gold has been rising in recent weeks, amid concerns over the impact of Trump's policies. It has gained 10% since the start of the year, after ending 2024 at $2,623 an ounce.
Aluminium prices also rose, as investors worried that the tariffs could lead to supply problems and hit economic growth, which would reduce demand for the metal. The three-month aluminium contract on the London Metal Exchange has gained by 0.3% to $2,635 (£2,122) a tonne.
Speaking to reporters aboard Air Force One, the US president said he would announce reciprocal tariffs on Tuesday or Wednesday, to take effect almost immediately, matching the tariff rates levied by other countries. 'Very simply, it's, if they charge us, we charge them,' Trump said.
Canada, Brazil, Mexico, South Korea and Vietnam are the biggest sellers of steel into the US, according to government and American Iron and Steel Institute data, while Canada is the main supplier of imported aluminium.
'I suspect US manufacturers will have to wear higher prices as a result of these 25% tariffs. Its import reliance is high, around 40%-45% for aluminium and 12%-15% for steel,' said Daniel Hynes, the senior commodity strategist at ANZ bank in Sydney.
The Jefferies analysts Chloe Lemarie and Ben Brown said the new metal tariffs were likely to be less disruptive than the shift away from Russian-sourced titanium, which was sometimes two to three times cheaper than alternative sources, but added that they would still represent a concern for the civil aerospace supply chain.
In South Korea, the industry ministry said on Monday that it held an emergency meeting with steelmakers in Seoul to discuss measures to minimise the impact of potential tariffs. Shares of Hyundai Steel, the country's oldest steelmaking company, fell as much as 2.9%.
The company, which supplies steel to Hyundai and Kia's car factories in the US, has said previously that it was considering building a new steel plant in America.
Ministers in Australia will push for an exemption from US tariffs on steel and aluminium imports. Anthony Albanese, the prime minister, said he will make the case for 'free and fair trade' with the US in an upcoming call with Trump.
The dollar rose by 0.2% against a basket of leading currencies on Monday, while yields (effectively the interest rate) on US government bonds, known as treasuries, edged higher.
Trump said on Sunday that his administration was examining US treasury debt payments for possible fraud, suggesting that the country could have less debt than thought. According to the US treasury, the US has $36tn of public debt, equal to more than 120% of GDP.
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Trump said administration officials who have been combing through payment records to identify any wasteful spending have turned their attention to debt payments.
'We're even looking at treasuries,' Trump said. 'There could be a problem – you've been reading about that, with treasuries and that could be an interesting problem.'
He added: 'It could be that a lot of those things don't count. In other words, that some of that stuff that we're finding is very fraudulent, therefore maybe we have less debt than we thought.'
It was not clear whether Trump was referring to debt service or other government payments made by the treasury department.
Trump's proposed tax cuts would add trillions of dollars more in debt, according to independent budget watchdogs.
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