Pound, gold and oil prices in focus: commodity and currency check, 10 February

Yahoo

10-02-2025

The pound held steady against a stronger dollar, inching just above the flatline at $1.2399, as president Donald Trump's latest tariff threats spurred demand for the traditional safe-haven greenback.
Trump announced plans to impose a 25% tariff on all steel and aluminium imports into the US, including shipments from Canada and Mexico. The president confirmed that he would make the formal announcement on Monday, marking another significant escalation in his ongoing trade policy overhaul.
Speaking aboard Air Force One while en route from Florida to New Orleans for the Super Bowl, Trump said the new tariffs would be in addition to existing duties on metals.
"Any steel coming into the United States is going to have a 25% tariff," Trump told reporters on Sunday.
Although tariffs on UK exports to the US remain a possibility, Trump expressed confidence that a deal "can be worked out." Traders are expected to monitor closely any developments around additional tariff measures from the US president.
Home Office minister Dame Angela Eagle said the UK will have to 'wait and see' if Trump provides more clarity on his threat to impose tariffs on all steel and aluminium imports to the US.
She said: 'We have a very balanced trading relationship with the US – I think £300bn worth of trade between our countries – and I think it's in the best interests of both of us, as longstanding allies and neighbours, that we carry on with that balanced trade.'
UBS noted: 'We believe tariff risks are here to stay and could resurface at any time. Trump's focus is likely to turn to Europe next. Even though the UK will not be Trump's main target in a trade war, we see the recent recovery in GBPUSD as overdone and expect a setback in the coming weeks.'
Meanwhile, sterling was higher against the euro (GBPEUR=X) on Monday morning, at €1.2024.
Gold prices soared to a record high as investors flocked to the precious metal for a safe haven as all-out trade war looms.
The spot price of gold jumped 1.2%, reaching $2,895.60 per ounce, while gold futures rose 1.17% to $2,921.40.
'Gold remains in a sweet spot, with little standing in its way,' Westpac Banking Corp. analyst Richard Franulovich said in a note.
'An intrinsically unpredictable and disruptive Trump, hurtling tariff threats at allies and adversaries alike, alongside the threats of 100% tariffs on the BRICs if they diversify away from the dollar, all point to a lift in gold's safe haven appeal.'
The yellow metal has now gained 10% so far in 2025, building on its 26% rise in 2024.
Kathleen Brooks, research director at XTB, said: 'Interestingly, Trump announced his latest tariffs late on Sunday, which suggests that he is not too worried about the market reaction.
"Typically, Trump has announced tariffs earlier in the weekend, as if he was watching the reaction and to give himself time to back track before stocks or risk assets sold off too sharply. This may suggest that Trump is determined to impose tariffs on these industrial metals.
'These tariffs are targeting specific products, rather than individual countries, which makes it hard for any negotiations to take place. We think that this move could boost the gold price, as it may lead to a further flurry of demand to bring gold on shore to the US, in case Trump imposes tariffs on precious metals.
'The question for investors is whether gold will reach the psychologically significant $3,000 level on the back of ever-growing tariff levies. So far, the gold price is higher by $25 early on Monday.'
Oil prices edged higher as fears of escalating trade wars and increased inflationary pressures grew following new tariff threats on steel and aluminium, as well as potential retaliatory tariffs from China.
Brent crude futures rose 0.4% to $74.97 per barrel, while US West Texas Intermediate (WTI) crude climbed by the same margin to $71.31 per barrel.
The developments have raised concerns about the potential impact on global economic growth and energy demand. Experts warned that President Trump's tariff threats could lead to a full-blown trade war, further exacerbating fears that the US's protectionist policies might increase inflationary pressures domestically.
In response, China's retaliatory tariffs against the US took effect today, following failed negotiations between Beijing and Washington. Oil and natural gas traders are pushing for exemptions on US crude oil and liquefied natural gas imports from China.
Meanwhile, continued uncertainty surrounding US Federal Reserve policies, along with US sanctions on Iranian oil exports, has added further volatility to the energy markets.
In broader market movements, the FTSE 100 (^FTSE) was higher on Monday morning, advancing 0.3% to 8,729 points. For more details, check our live coverage here.