The price of gold has skyrocketed to a record high this week after President Trump announced new tariffs on auto imports that have created a safe-haven demand for gold.
Since the beginning of the year, gold prices in the U.S. have been on the rise as more precious metals flow into the country and out of the Bank of England, and fears of a global trade influence investors’ confidence. Newsmax reported that gold was up 0.6 percent at $3,035.98 an ounce as of 0940 GMT. This year, the commodity reached its highest peak on March 21 at 0.8 percent to $3,045. Overall, gold has risen by an impressive 15 percent this year.
It’s not just the price that has been increasing but also the country’s gold stocks. According to Fox Business, in February, around $4 billion in gold was flown to New York as prices have been higher than in London, leaving a shortage of gold in London. What is the cause of this safe-haven demand? President Trump’s policies.
Newsmax reported what Nitesh Shah, commodities strategist at WisdomTree, said about the increase in gold. He said, “Policymaking coming from the U.S. is driving huge amounts of uncertainty and gold, being the defensive, anti-fragile asset, is largely going up because of those uncertainties.”
In addition to the tariffs on steel and aluminum on Wednesday, President Trump had announced a 25 percent tariff on all autos and auto parts that are not produced in the U.S. starting on April 2. The policy will foster domestic manufacturing, and United Auto Workers President Shawn Fain is very happy about the new tariff. According to Axios, Fain revealed, “These tariffs are a major step in the right direction for autoworkers and blue-collar communities across the country, and it is now on the automakers, from the Big Three to Volkswagen and beyond, to bring back good union jobs to the U.S.”
President Trump still has further plans to spur growth in the country’s economy by implementing tariffs on copper, lumber, imported oil and pharmaceutical drugs, AP News reports.
