Gold headed toward US$3,000 on Trump threats

Reuters and staff reporter

Gold prices advanced to an all-time high of US$2,946 (HK$22,979) an ounce on yesterday as trade war tensions and concerns over global economic growth drove safe-haven flows following US President Donald Trump's new tariff threats.

"Gold's rally appears to be driven by President Trump's remarks on upcoming tariffs for autos and pharmaceuticals, which could pave the way for a push toward US$3,000," said Zain Vawda, market analyst at MarketPulse by OANDA.

Since taking office, Trump imposed a 10 percent tariff on Chinese imports, set a 25 percent tariff on steel and aluminum. Adding to the tariffs agenda, the US president said on Tuesday he intends to impose auto tariffs "in the neighborhood of 25 percent" and similar duties on semiconductors and pharmaceutical imports.

"I don't see central banks stopping buying gold anytime soon, but rather expecting them to keep diversifying their reserves into gold and support the gold price," UBS analyst Giovanni Staunovo said.

In Hong Kong, stocks edged down 0.14 percent as turnover plunged, following Trump's tariff plans.

The benchmark Hang Seng Index closed 32 points lower at 22,944 points.

The main board's turnover decreased to HK$262.56 billion, dropping more than 34 percent from Monday.

The blue-chip HSI once fell to 22,649 points but rallied to a high of 22,975 in the morning, propelled in part by the Hang Seng Tech Index, which rose 0.59 percent to 5,672 points.

Chinese chip giant Semiconductor Manufacturing International (0981) jumped more than 8 percent to HK$51.80 while Hua Hong Semiconductor (1347) surged about 23 percent to HK$38.30.

Shenzhen-based telecom device manufacturer ZTE (0763) advanced by around 7.5 percent, and Ubtech Robotics (9880) leaped 13.5 percent.