Feb 10 (Reuters) - The dollar index gained on Monday, while gold hit a record high after President Donald Trump threatened to impose tariffs on steel and aluminum imports. Demand for the greenback emerged after Trump pledged, over the weekend, that 25% tariffs could be announced on Monday. Volumes, however, were mixed as investors awaited Wednesday’s U.S. consumer inflation report and semiannual testimony to Congress by Fed Chair Jerome Powell starting Tuesday. A jump in crude and natural gas prices offered a tailwind for the greenback with Indian companies and Taiwan possibly looking to buy U.S. LNG to reduce tariff risks. Gold’s advance was aided by growing uncertainty about the status of the Gaza ceasefire. EUR/USD fell for a third day though equity market gains, including a record close for the STOXX 600, and firmer European bond yields helped to limit the damage. The Sentix index showed investor morale in the euro zone at its highest level since July. European Central Bank's President Christine Lagarde told European lawmakers that inflation is set to return to the 2% medium-term target this year with risks balanced, though trade frictions are muddying the outlook. German Chancellor Olaf Scholz said the European Union is still awaiting formal notice of any new tariffs from the United States but that any such move would be met with retaliatory measures. Ukrainian President Volodymyr Zelenskiy said that "serious people" from the Trump administration will visit his country this week.
GBP/USD fell to its 21-day moving average at 1.2370 in relatively active trade compared to other G10 peers. UK December GDP data due on Thursday may reinforce the need for additional Bank of England rate cuts.
USD/JPY rose marginally amid short-covering by various accounts and yen crosses advanced, matching broad gains in equity markets. Nearby resistance for USD/JPY is seen at its 152.77 200-day moving average.
Treasury yields were mixed with the curve steepening modestly. The 2s-10s curve was up about 2 basis points to +22.2bp.
The S&P 500 rose 0.68%, fueled by energy sector gains
Gold rose 1.6% and copper gained 2.5%. Heading toward the close: EUR/USD -0.17%, USD/JPY +0.42%, GBP/USD -0.25%, AUD/USD +0.08%, =USD +0.02%, EUR/JPY +0.24%, GBP/JPY +0.07%, AUD/JPY +0.42%.(Editing by Burton Frierson Reporting by Robert Fullem)
