Gold climbs as tariff and geopolitical risks spur safe‑haven demand

Gold bars are stored in a safe deposit room in Munich, Germany, Jan. 28. Reuters-Yonhap

Gold gained on Wednesday as investors moved into safe havens on concerns that tariffs could stoke inflation, while ongoing tensions between Iran and the United States also kept bids for safety intact. Spot gold rose 1.1 percent to $5,202.28 per ounce, by 02:00 p.m. ET (1900 GMT). U.S. gold futures for April delivery settled about 1 percent higher at $5,226.20.

"There's an inflationary impact from tariffs and high oil prices, especially if an attack is imminent, and I think there's also some hedging by investors, who may be turning to gold," said Bart Melek, global head of commodity strategy at TD Securities.

The U.S. began collecting a temporary 10 percent global import tariff on Tuesday, but a White House official said the Trump administration was trying to raise it to 15 percent. President Donald Trump, in his State of the Union speech, said "almost all" countries and corporations want to maintain their existing tariff and investment agreements with Washington.

Trump also laid out his case for a possible attack on Iran, saying he would not allow the world's biggest sponsor of terrorism to have a nuclear weapon. Meanwhile, Iran and the U.S. were set to hold a third round of nuclear talks on Thursday in Geneva.

Gold is widely seen as a safe-haven asset during times of uncertainty. Despite the non-yielding asset gaining in a low interest rate environment, it is also seen as a hedge against inflation.

Prices scaled a record high of $5,594.82 on Jan. 29 and were up about 20 percent so far this year. "Investors have slowed the pace at which they increase their exposure to gold. Hence, we factor in a period of potentially weaker gold prices into spring, although the resurgent tariff uncertainty may make the period of consolidation relatively short-lived," Bank of America said in a note, adding that it expects prices to hit $6,000 per ounce over the next 12 months.

Spot silver climbed 3.9 percent to $90.73 per ounce, a three-week high. On Jan. 29, silver scaled an all-time peak of $121.64.

BofA noted that the white metal could rise again above $100 per ounce this year. Spot platinum rose 7.1 percent to $2,320.90 per ounce, its highest point since Jan. 29, while palladium climbed 2.6 percent to $1,814.41.