In the wake of the tariff policies intensified by the new U.S. President Trump, the global gold market has experienced a strong surge. Recently, the prices of gold in spot and future trading have repeatedly reached all-time highs, reflecting the market's strong reaction to the demand for risk aversion amidst uncertainty. As of February 11th, Beijing time, the London spot gold price momentarily broke through $2,942.7 per ounce, while the New York futures gold price climbed to $2,968.5 per ounce, with increases exceeding 1%. Behind this surge, in addition to the skyrocketing global demand for risk aversion, is the close link to the Trump administration's persistent strengthening of tariff policies.
Trump's tariff policy continues to escalate, imposing taxes on imports from countries like Colombia, Canada, Mexico, and comprehensively on all steel and aluminum imports from China. This series of measures has increased market uncertainty, especially casting shadows over the future growth prospects of globally export-oriented economies. Southeast Asian countries like the Philippines and Indonesia face substantial capital outflow pressures, exacerbating market panic, which also further drives the demand for gold as a safe haven.
Besides the direct impact of tariff policies, arbitrage activities in the gold market have also contributed to the rapid increase in demand for spot gold. Since late January, the inventory of New York futures gold has been continuously growing, while the London spot gold market has experienced a shortage of gold bars, with the wait time for gold withdrawals from the Bank of England vault extending to 4 to 8 weeks. According to data released by the London Bullion Market Association (LBMA) on February 7th, as of the end of January, the gold reserves in London vaults decreased by about 138.91 tons, marking the largest decline since 2016. Meanwhile, COMEX gold inventory increased by 42.99%, indicating considerable arbitrage opportunities in the gold market, further supporting the rise in spot gold prices.
Looking ahead, although the continued expansion of U.S. tariff policies will remain one of the factors supporting gold prices in the short term, the market must also be wary of the risk of high-level corrections caused by fluctuating news. In the short term, arbitrage activities and market uncertainty may continue to support spot gold prices, but in the medium to long term, the downward expectations for U.S. economic growth and the potential impact of the Treasury on long-term U.S. bond demand will suppress the strengthening of the dollar, further driving up gold prices.
In the domestic market, the investment demand for gold has weakened. Since February, the premium margin of Shanghai gold has narrowed, and the stability of the RMB exchange rate has weakened domestic investment demand for gold. Although pre-and post-Spring Festival gold consumption demand has been relatively robust, the fading holiday effect and high store prices have also dampened consumers' willingness to purchase gold bars and jewelry.
In general, the gold market might face certain price volatility risks in the short term, and investors need to be cautious about potential high-level corrections in gold prices. However, in the long term, due to reduced economic growth expectations and increased demand for gold as a haven, gold prices may maintain an upward trend, and timely buying of physical gold during dips might yield more stable returns.
