Gold prices steady as dollar weakened
Date
1/20/2025 6:36:47 AM
(MENAFN) Gold prices steadied on Monday as the dollar weakened, with investors closely watching Donald Trump's inaugural address for clues on his economic policies. These insights are anticipated to clarify inflation expectations and guide future Federal Reserve decisions on interest rates. Spot gold rose by 0.3% to $2,711.29 per ounce by 0659 GMT, recovering from a 0.5% dip earlier in the day. U.S. gold futures increased by 0.1% to $2,752.40.
The dollar index (.DXY) was weaker at the start of a crucial week as Trump prepared to take office at 12 p.m. ET (1700 GMT). A weaker dollar boosts gold's appeal to foreign buyers. Tim Waterer, senior analyst at KCM Trade, noted that if Trump adopts a more moderate approach to trade and tariffs, it could ease inflation fears, driving down the dollar and Treasury yields, with gold benefiting from this shift.
Gold is often used as a hedge against inflation, but its appeal wanes when interest rates are high. Expectations of increased tariffs under Trump could drive inflation, further enhancing gold's safe-haven status. Goldman Sachs suggested that gold is likely to remain exempt from comprehensive tariffs, forecasting a 10% chance of a 10% tariff on gold in the next year. The bank also raised its forecast for central bank gold demand, maintaining a long-term price target of $3,000 per ounce by mid-2026, with modest interest rate cuts expected in 2025.
U.S. stocks rose on Friday, with the S&P 500 and Dow marking their largest weekly gains since early November, while the Nasdaq saw its best week since early December. According to a majority of economists surveyed by Reuters, the Federal Reserve is expected to keep interest rates unchanged on January 29 and resume rate cuts in March. Meanwhile, spot silver rose 0.2% to $30.39 an ounce, palladium increased 0.2% to $949.05, and platinum fell 0.4% to $938.93.
MENAFN20012025000045015687ID1109108381
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.