Update: Gold Rises on Safe-Haven Demand and a Weakening Dollar as the U.S. Readies Tariffs

(Updates prices.) Gold was sharply higher mid-afternoon on Monday as the dollar plunged ahead of the start of promised U.S. tariffs on imports from its two largest trading partners, Canada and Mexico, while safe-haven demand increased after a Friday meeting between U.S. President Donald Trump and Volodymyr Zelensky, his Ukrainian counterpart, turned into a shouting match. Gold for April delivery was last seen up US$52.30 to US$2,900.80 per ounce. Trump has promised to impose 25% tariffs on imports from Canada and Mexico beginning on Tuesday, along with a 10% levy on energy imports from Canada, which supplies about 20% of U.S. oil demand. The president is also raising the tariff on imports from China to 20% from 10%. Canada and Mexico have said they will impose retaliatory tariffs on American imports, threatening a large-scale trade war that could boost inflation and slow growth in all three countries. "Gold trades higher after its first weekly loss this year on fears that Trump's tariff plans will stoke inflation and lower economic growth, potentially causing stagflation," Saxo Bank noted. Geopolitical tensions also heightened after the Friday Oval Office meeting between Zelensky, Trump and Vice-President J.D. Vance ended in a shouting match The two most senior U.S. officials attempted to humiliate the Ukrainian president, ending hopes for a quick settlement to Russia's war on Ukraine while raising fears the United States is abandoning a democratic ally and switching its support to Russia. The dollar was sharply lower early, with the ICE dollar index last seen down 1.04 points to 106.57. Treasury yields also fell, with the U.S. two-year note last seen paying 3.991%, down 1.6 basis points, while the yield on the 10-year note was down 4.5 points to 4.175%