Investing.com - Gold prices rose on Monday in Asia amid worries over Mexico and escalating trade tension between China and the U.S.
Gold futures for June delivery, traded on the Comex division of the New York Mercantile Exchange, was up 0.4% at $1,316.45 per ounce by 12:45 AM ET (04:45 GMT).
The Trump administration announced on Thursday it will impose a 5% tariff on all imported goods from Mexico beginning June 10 and “gradually increase” that tax to 25% until the flow of undocumented migrants across the border stops.
The news sent the yellow metal higher. It was also boosted in the wake of more Sino-U.S. trade war jitters.
China issued a white paper over the weekend that claimed the U.S. is an untrustworthy negotiator and blamed it for starting global trade problems.
Separately, Vice Commerce Minister Wang Shouwen said at a press conference on Sunday that the main reason trade talks stalled last month was that “the U.S. has backtracked.”
On Sunday, China implemented previously announced tariff hikes and said it will take action against “unreliable” foreign companies, with a list of violators pending.
Gold has been the safe-haven of choice in times of political and economic troubles, but a rising U.S. dollar has capped the precious metal’s gains.
"Gold finally reached the $1,300 area even with dollar strength as global growth is threatened by tariffs," George Gero, precious metals analyst at RBC Wealth Management, said, citing "tariffs on car parts that come from Mexico, that could hurt future sales, with higher prices passed on to consumers" as the trigger for the move.
"The Fed may be forced to look deeper into cutting rates instead of hiking," Gero added.
Inflation has been running below levels targeted by the U.S. Federal Reserve, placing Chairman Jerome Powell under the scrutiny of Trump, who has been pushing for lower interest rates. Powell said recently he believed the soft inflation environment "may wind up being transient."