Gold prices fell on Monday, under pressure from the strength of the dollar after US President-elect Donald Trump threatened to impose heavy customs tariffs on the BRICS group of countries.
Safe-haven demand for gold was also disrupted by signs that the ceasefire between Israel and Hezbollah appears to be holding, although rising tensions between Russia and Ukraine kept some safe-haven buying in play.
Spot gold fell 0.9% to $2,629.74 an ounce, while gold futures expiring in February fell 1.1% to $2,652.11 an ounce.
Trump threatened to impose “100% tariffs” on the BRICS bloc, warning them to look for alternatives to the dollar.
His threat hurt the bloc’s currencies and sent the dollar higher, as traders feared more protectionist policies by the United States under Trump. Last week, the president-elect threatened to impose additional tariffs on China, Canada and Mexico – a move that could reignite a global trade war.
Trump’s threat supported the dollar, which in turn affected metal markets in various fields. Uncertainty about higher long-term inflation under Trump – which could keep interest rates high – has also destabilized metals markets.
