Gold prices took a hit on Monday as the dollar strengthened following U.S. President-elect Donald Trump’s warning to impose steep tariffs on the BRICS group of countries. This move was aimed at discouraging them from seeking alternatives to the dollar.
Additionally, safe haven demand for gold was dampened by the ceasefire between Israel and Hezbollah holding up, although tensions between Russia and Ukraine kept some buying interest in play.
Gold futures fell 0.7% to $2,636.06 an ounce, while spot gold dropped 0.8% to $2,658.84 an ounce by 1:23 p.m. ET.
Trump’s Tariff Threats Boost Dollar, Weigh on Gold
Trump’s threat of imposing “100% tariffs” on the BRICS nations led to a decline in their currencies, pushing up the dollar as traders feared more protectionist measures under the upcoming U.S. administration. This, in turn, impacted metal markets as uncertainty surrounding potential inflation and interest rate policies lingered.
Other precious metals also saw declines, with silver falling 0.5% to $950 an ounce, and platinum dropping 0.7% to $30.883 an ounce.
Copper Prices Dip Amid Tariff Concerns and Strong Dollar
Copper prices also faced downward pressure on Monday due to fears of additional U.S. tariffs and a stronger dollar, which offset positive signals from China, the top copper importer. Despite China’s manufacturing activity showing growth in November, concerns over a potential trade war with the U.S. continued to weigh on the markets.
Even with Beijing’s efforts to stimulate economic growth, traders remained cautious and awaited further stimulus measures from upcoming political meetings in December.
Overall, the threat of tariffs and a strong dollar have impacted precious metals and copper prices, with market participants closely monitoring developments in global trade policies for potential market implications.