Gold prices fell from a near three-month high on Thursday, driven by a rising dollar, as investors await new guidance from U.S. President Donald Trump’s administration on trade policies. .
Spot gold was down 0.1% at $2,751.87 an ounce by 0307 GMT. Prices rose to $2,763.43 on Wednesday, their highest since Oct. 31, when they hit a record high of $2,790.15.
U.S. gold futures were down 0.3% at $2,761.70.
“This is just a technical pullback because the dollar has reclaimed the $108 level, triggering profit-taking, but the trend for gold should be positive,” said Ajay Kedia, director of Kedia Commodities in Mumbai. [USD/]
Trump has proposed taxes of around 25% on Mexico and Canada and tariffs of 10% on China starting February 1. He also promised tariffs on European imports, without giving further details.
“The impact of Trump’s policies on gold is whether the combination of tax cuts, deregulation, tariffs and deportations will result in a sharp inflationary surge,” said Ilya Spivak, head of global macro at Tastylive.
“If so, Fed rate cuts will be limited and gold will likely be in trouble.
-The Federal Reserve meets next week amid continued economic growth and falling inflation, but faces uncertainties related to Trump’s proposed policies that analysts view as inflationary.
The US central bank is expected to maintain its benchmark interest rate at its next meeting on January 28-29. Higher interest rates reduce the attractiveness of non-yielding gold.
European Central Bank policymakers lined up behind further rate cuts on Wednesday, indicating that next week’s cut is all but a given.
Gold may face resistance at $2,759, which could trigger a correction, according to Reuters technical analyst Wang Tao.
Spot silver fell 0.5% to $30.63 an ounce, while platinum lost 0.5% to $941.50. Palladium stabilized at $977.34.
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