Gold prices rose for a second session on Tuesday as the dollar weakened as markets weighed the possible consequences of US President Donald Trump’s policies during his second term after his inauguration.
Spot gold gained 0.6% to $2,724.74 an ounce by 0240 GMT. U.S. gold futures were down 0.2% at $2,742.50.
The dollar fell around 1% after reports suggested any new taxes would be imposed in a “measured” manner. A weaker dollar makes gold more attractive to foreign buyers. [USD/]
“Risk sentiment is relieved to know that tariffs have not been an immediate priority. The shift away from bets on looming trade tensions is most evident in the US dollar,” said Yeap Jun Rong, strategist market at IG.
“Mixed momentum is allowing gold prices to hold steady for now and we can expect gold to remain an attractive hedging instrument. The $2,720 level will be immediate resistance to watch.”
After weeks of global speculation over which tariffs Trump would impose on his first day in office, news that Trump would take more time on tariffs led to a relief rally in global stocks and put pressure on the American dollar.
Mr. Trump had proposed tariffs of up to 10% on global imports, 60% on Chinese goods and a 25% import surcharge on Canadian and Mexican goods.
-While gold is traditionally seen as a hedge against inflation, Trump’s policies are seen as inflationary, which could lead the Federal Reserve to maintain higher interest rates, thereby affecting the attractiveness of gold. gold.
How well the new administration implements Trump’s policy commitments will significantly influence the future direction of US interest rates.
Zero-yielding bullion tends to thrive in a low interest rate environment.
Spot silver rose 0.4% to $30.61 an ounce. Palladium fell 1.2% to $933.25 and platinum lost 0.1% to $941.30.
Canada
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