Gold may snake its way to US$3,000

Gold prices erased early losses yesterday to remain close to record highs on safe-haven demand driven by inflation concerns sparked by US President Donald Trump's tariffs on Mexico, Canada and China.

Having initially slid more than 1 percent on a surging US dollar, spot gold recovered to be down 0.1 percent at US$2,799.09 (HK$21,832.90) an ounce by 1146 GMT while US gold futures lost 0.1 percent to US$2,832.

Gold has a good chance of rising above US$3,000 in the Year of the Snake on the back of geopolitical tensions, rate cuts and trade wars, said Haywood Cheung Tak-hay, president of the Hong Kong Gold Exchange.

He believes that gold trading volumes in Hong Kong could rise up to 15 percent - and globally by 30 percent - this lunar year.

Value Partners (0806) expects gold to continue its bull run with a target of US$3,000 for this year.

The Trump administration's measures such as tax cuts and increased defense spending may widen the US budget deficit, which, along with the tariff policy, may exacerbate inflationary pressures, pushing up gold prices, according to Value Partners.

However, cryptocurrencies fell steeply, with bitcoin hitting a three-week low of US$91,441.89, as the risk of a trade war spooked investors.

Bitcoin, the largest cryptocurrency, fell overnight and stood at US$95,730.35 at 0941 GMT, down 6.2 percent for the day.

Smaller cryptocurrency ether lost nearly 25 percent in value since Friday, marking its biggest three-day loss since November 2022. It last fetched US$2,592.14.

In Hong Kong, bitcoin-related stocks fell sharply, with Boyaa Interactive International (0434) dropping 4.6 percent to HK$4.73 and OSL (0863) losing 2.6 percent to HK$9.05.

Agencies and staff reporter