With the introduction of US car tariffs raising fears about next week’s retaliatory measures, gold’s attractiveness as a safe haven drove its price up above $3,030 per ounce on Thursday, reaching historic highs.
Stoking concerns of a wider trade war and worldwide economic repercussions, President Trump reiterated his promise to impose taxes on foreign manufacturers by announcing a 25% tariff on all imported vehicles, light trucks, and specific auto parts.
While indicating caution, the Fed this week maintained its December prediction of two rate cuts by year-end.
Reiterating Chair Powell’s position that rate reduction is not likely, Minneapolis Fed President Kashkari praised inflation improvement but emphasised the need for more action.
In anticipation of more policy information, investors now await Friday’s PCE data, the Fed’s favourite inflation indicator.
