Gold Firms On Softer Dollar, Trump's White House Return In Spotlight
Date
1/20/2025 2:39:30 PM
(MENAFN- Khaleej Times)
Gold prices firmed on Monday, supported by a weaker US dollar, as markets awaited Donald Trump's return to the White House and his inauguration speech later in the day for hints on the impact of his policies on the economy.
Spot gold added 0.3 per cent to $2,708.29 per ounce as of 1545 GMT.
US gold futures fell 0.7 per cent at $2,729.20, with trading volumes thin due to the US markets being closed for the Martin Luther King Jr. Day holiday.
“I believe Donald trump (presidency) will result in higher market volatility, while some of his policies might keep inflation higher for longer. This should continue to support safe-haven assets like gold,” UBS analyst Giovanni Staunovo said.
Gold is used as a hedge against inflation, although Trump's inflationary tariff policies could prompt the Federal Reserve to keep rates higher for longer, diminishing the non-yielding bullion's appeal.
Trump has talked of tariffs of as much as 10 per cent on global imports as well as 60 per cent on Chinese goods and a 25 per cent import surcharge on Canadian and Mexican products.
“Gold's status as a financial asset makes it likely exempt from broad-based tariffs, and we therefore assign a 10 per cent probability to a 10 per cent effective tariff on gold being introduced within the next 12 months,” Goldman Sachs said.
Bullion hit its highest since Dec. 12, 2024, last week after cooler core inflation data, Fed Governor Waller's dovish remarks and reports of gradual tariff introductions led traders to price in two rate cuts this year from just one earlier.
The dollar index dropped 1 per cent, making gold more attractive to foreign buyers.
Spot silver rose 0.4 per cent to $30.46 per ounce, palladium shed 1 per cent to $938.25 and platinum declined 0.2 per cent to $940.40.
MENAFN20012025000049011007ID1109109925
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.