Gold Hits Record High as Investors Eye Fed Chair Powell’s Speech on Tariffs

Gold surged to an all-time high above $2,935 an ounce on Tuesday, while the U.S. dollar remained firm and Hong Kong stocks climbed to a four-month peak. Investors are closely watching Federal Reserve Chair Jerome Powell’s upcoming speech on inflation and tariffs.

Oil prices held onto sharp overnight gains, and Hong Kong’s Hang Seng has jumped over 12% in a month. Market sentiment was buoyed by the Trump administration's fluctuating stance on trade policies, including tariffs on Canada and Mexico. On Monday, Trump imposed a 25% tariff on steel and aluminum imports, lifting U.S. steel stocks, with Nucor (NYSE:NUE) up 5.6% and Steel Dynamics (NASDAQ:STLD) gaining 4.9%. A 10% tariff on Chinese imports took effect earlier, with China responding with retaliatory duties on U.S. energy and goods.

Despite little progress in U.S.-China trade talks, investors remain optimistic. "He's a business person by nature, so there are deals to be done," said Prashant Bhayani, chief investment officer at BNP Paribas Wealth Management.

In currency markets, the Chinese yuan weakened past 7.3 per dollar, trading at 7.3071. The Australian dollar held at $0.6273, with Trump considering tariff exemptions for Australia. The dollar was steady at 152.01 yen and $1.03 per euro.

On Wall Street, stocks closed higher, led by energy and tech gains. The S&P 500 materials index rose 0.5%, and McDonald’s (NYSE:MCD) surged 4.8% on strong earnings. Europe’s STOXX 600 hit a record 545.92, driven by a 1.5% rise in oil and gas stocks.

Markets expect the Fed to hold rates steady in March, with a potential cut in June. Benchmark 10-year Treasury yields stood at 4.495%, with Japan's public holiday limiting trading.