Gold prices jumped to a over two-month peak on Tuesday, supported by a weaker dollar and as markets flocked to the safe-haven asset as uncertainty surrounding U.S. President Donald Trump’s potential tariffs continued to loom.
Spot gold XAU= climbed 1.1% to $2,738.19 per ounce by 10:00 a.m. ET (1500 GMT), reaching its highest level since Nov. 6 and nearing the all-time high of $2,790.15 set in October.
U.S. gold futures GCv1 were 0.2% higher at $2,754.40.
The dollar index .DXY slipped 0.9%, holding close to a 2-week low hit in the previous session and making bullion less expensive for other currency holders.
“Today’s move has largely been about the threat of U.S. blanket tariffs following Trump’s inauguration. The information with respect to potential tariffs has only come in at a trickle,” said Daniel Ghali, commodity strategist at TD Securities.
The newly elected president has not provided any specific details about the universal tariffs or extra surcharges on key trade partners, a key plank of his election campaign.
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He has, however, hinted at the possibility of imposing duties on Canadian and Mexican goods as soon as Feb. 1.
During the first year of Trump’s first administration in 2017, bullion logged a 13% yearly gain, its best annual performance in seven.
Bullion is considered a safe investment during economic and geopolitical uncertainty, but Trump’s proposed policies are widely seen as inflationary, which could push the U.S. Federal Reserve to maintain interest rates higher for longer to curb price pressures.
High rates hurt the non-yielding asset’s appeal.
“The market is probably also looking ahead to next week’s FOMC meeting and Personal Consumption Expenditure (PCE) data, particularly the inflation read,” said Peter Grant, vice president and senior metals strategist at Zaner Metals.
“I don’t think anybody’s expecting the Fed to do anything next week, but certainly the policy statement will be looked at very closely for hints about the remainder of the year.”
Spot silver XAG= rose 0.7% to $30.71 per ounce. Palladium XPD= dropped 0.5% to $940.00 and platinum XPT= added 0.3% to $945.65.
Reporting by Anjana Anil in Bengaluru; Editing by Tasim Zahid
