Gold Crosses $2,900 For First Time Ever; Trump Moves to Discontinue the Penny

 

Gold Breaks New Record On Safe Haven Buying While Trump Takes Aim At Pennies

(Bullion News Network) – Gold broke through another major psychological barrier on Monday, crossing $2,900 for the first time ever. The new all-time high comes on the heels of another round of tariff announcements by President Donald Trump. After hinting about another round of tariffs over the weekend, President Trump today signed an executive order that would substantially raise tariffs on imported steel and aluminum in an effort to strengthen the United States manufacturing industry. Safe haven assets, including gold and silver, jumped on the news as traders moved to hedge against the potentially inflationary consequences of the White House’s latest policy change. 

Trump first mentioned the new executive action Sunday and explained that an additional set of reciprocal tariffs will be announced sometime this week. These tariffs are part of the White House’s broader objective to create a more “level playing field” and reduce the USA’s reliance on foreign goods, investments, and manufacturing materials. This tariff is not the first time the U.S. president has taken aim at steel and aluminum imports. During his first term in 2018, President Trump imposed a tariff of 10% on steel and aluminum imports. The executive order is also expected to eliminate quota deals that allowed countries to import millions of metric tons in steel and aluminum over the past few years. 

Economists and politicians are divided on whether tariffs are an effective strategy for pursuing America’s economic and foreign policy objectives. Some economists say that excessive tariffs could raise prices for consumers and inflame relations with U.S. allies. Additionally, they say, the threat of retaliatory tariffs could lead to trade wars that would raise prices and negatively impact the negotiating power of the U.S. economy and government. 

President Trump disagrees, saying instead that tariffs could raise considerable money for the United States economy and function as an effective bargaining tool to pursue America’s policy interests abroad. These economic measures are “very powerful,” the U.S. leader said, and are effective “economically and in getting everything else you want.” The White House’s latest round of tariffs is expected to impact the largest exporters of steel to the United States, including Canada, Brazil, Mexico, Japan, South Korea, and Germany. 

Gold climbed over $60 on the news, crossing the $2,900/ozt line for the first time ever. Silver also jumped to start the week, gaining over $0.20 as investors fled toward safe haven assets in anticipation of the new round of tariffs.

President Trump, DOGE Plan to Eliminate Pennies

President Trump also took action over the weekend to eliminate the penny, a one-cent currency unit that has been in place since 1793. The move is part of the administration’s wide cost-cutting objectives, many of which are spearheaded by the Department of Government Efficiency (DOGE) headed by billionaire Elon Musk. The official DOGE X account suggested the idea last month, and President Trump confirmed Sunday that he is instructing the Treasury to immediately cease the production of the one-cent copper coin. 

For far too long the United States has minted pennies which literally cost us more than 2 cents. This is so wasteful! I have instructed my Secretary of the US Treasury to stop producing new pennies. Let’s rip the waste out of our great nation’s budget, even if it’s a penny at a time.

Although this is the first time the American leader has taken aim at pennies, the suggestion is nothing new. It costs around 3.7 cents to produce a single penny, which has a face value of one cent. Economists have pointed out that it costs more to produce a penny than the coin is worth for years, and the one-cent piece isn’t the only U.S. coin that costs more money to produce than it’s worth. Nickels cost over 11 cents to produce and have a face value of 5 cents – a net loss of 6 cents per coin. 

Pennies have cost more than one cent to produce for nineteen years, according to officials at the United States Mint. In 2024, the U.S. Mint reported a net loss of $85,300,000 to produce over 3 billion pennies. If the penny is successfully eliminated under the Trump administration, analysts say that the nickel may be next on the chopping block. 

Experts say that the president’s order also poses a question of authority. Technically, Congress is responsible for managing the United States Mint and its production of currency coins. NPR reports that the “consensus seems to be that it would take an act of Congress to stop minting pennies,” although there “may be some gray area.” One economics professor said in a news release that the Department of the Treasury may be able to unilaterally cease the production of the one-cent piece, opening the door for executive intervention without an act of Congress. 

The official DOGE X account applauded the idea, saying that the cost-saving measure would likely result in significant long-term tax savings for American workers.