Gold surges to $3,000 amid trade war concerns, market uncertainty

February 21, 2025 (MLN): Gold neared $3,000 per ounce as traders marked one month since U.S. President Donald Trump’s return to the White House and five years since COVID-19 first rocked world markets, amid concerns that Trump may unleash a global trade war.

Bullion notched its 10th record high this year, partly fueled by safe-haven demand amid the tariff threats.

The dollar was subdued against major currencies while the yen stomped higher on bets of more Bank of Japan interest rate hikes.

Trump's latest tariff warning on Wednesday focused on pharmaceuticals, semiconductor chips, and wood, according to Reuters.

He also intends to hit car imports as soon as April 2. That, along with other threats, has exacerbated fears of a broad trade war and unnerved investors.

Ukraine's government bonds tumbled after Trump caused widespread alarm on Wednesday by calling Ukrainian President Volodymyr Zelenskiy a "dictator" and saying he needed to move fast to secure peace or risk having no country left.

Foreign ministers from the G20 top economies were meeting in South Africa. Top U.S. officials have snubbed the gathering and media reports on Thursday said the U.S. had opposed calling out Russian aggression at a virtual G7 meeting on Monday.

Mirabaud's head of emerging market debt, Daniel Moreno, said expectations that Trump would drive a peace deal that provided Ukraine with long-term security have all but been dashed.

"The way that things are developing with U.S-Russia talks and Trump criticisms the market is now realizing that is not the base case anymore."

"Trump is not indicating in any form that the resolution will be a good one in any way for Ukraine," he added.

Gold prices showed no signs of slowing, though. They rose to a fresh record high of $2,956.69 an ounce, Reuters further added.

The precious metal is now up 12% in 2025 after rising 27% last year, its best performance in over a decade. U.S. gold futures settled 0.7% higher at $2,956.10.

In the oil markets, Brent futures settled up 0.58% at $76.48 a barrel while U.S. West Texas Intermediate crude futures (WTI) for March delivery rose 0.44% to $72.57, underpinned by worries over supply disruptions in Russia.

In currencies, the yen strengthened against the greenback to an 11-week peak of 149.40 per dollar. The euro was up 0.77% at $1.0502.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.77% to 106.35.

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