Key information
- Spot gold reached 2.780,11 dollars l’once.
- Gold is on track to gain nearly 3 percent this week, thanks to downward pressure on the dollar.
- A weakening U.S. dollar and concerns over looming tariffs have contributed to gold’s appeal as a safe haven.
The price of gold surged in Asian trading on Friday, approaching record levels. The surge was fueled by the weakening of the U.S. dollar following President Donald Trump’s call for an immediate interest rate cut. Additionally, concerns over looming tariffs have contributed to gold’s appeal as a safe haven.
Spot gold hit $2,780.11 an ounce today, its highest level since late October, just below the all-time high of $2,790.17. Gold futures for February also hit $2,778.09 an ounce. This week, gold gained almost 3%, driven by downward pressure on the dollar from the phasing in of US tariffs and the demand for interest rate reductions from Trump.
At the time of publishing this article, the spot price is $2,776 per ounce. February futures are currently trading at $2,783.66 per ounce.
Market reactions
Trump’s call for a reduction in interest rates during his speech at the World Economic Forum in Davos boosted gold prices. Lower interest rates make gold more attractive relative to interest-bearing assets. Simultaneously, the US dollar index fell 0.4 percent in Asian trading on Friday, setting itself up for its worst week in two months. The dollar’s decline began Monday when Trump provided limited details regarding U.S. trade tariffs, suggesting a slower pace of implementation. A weaker dollar generally raises the price of gold as it becomes more affordable to buyers using other currencies.
-Uncertainty and volatility
The rise in bullion prices also reflects the market’s anticipation of global uncertainty. This uncertainty stems from the anticipated volatility caused by Trump’s policy announcements and tariff statements.
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