Gold holds steady as markets focus on Trump's policies
Tue Jan 21 2025
Gold prices steadied on Tuesday as markets evaluated the possible consequences of U.S. President Donald Trump's policies in his second term after his inauguration.
FUNDAMENTALS
* Spot gold was flat at $2,707.19 per ounce by 0107 GMT. U.S. gold futures dipped 0.7% to $2,730.
* After weeks of global speculation over which duties Trump would impose tariffs on his first day in office, news that Trump would take more time on tariffs drove a relief rally in global stocks and pressured the U.S. dollar.
* Trump has proposed tariffs of up to 10% on global imports, 60% on Chinese goods, and a 25% import surcharge on Canadian and Mexican products.
* While gold is traditionally viewed as an inflation hedge, Trump's policies are seen as inflationary which could lead the Federal Reserve to maintain higher interest rates, affecting gold's appeal.
* The degree to which the incoming administration implements Trump's policy pledges will significantly influence the future direction of U.S. interest rates.
* The non-yielding bullion tends to thrive in a low-interest rate environment.
* The dollar nursed broad losses after Trump stopped short of imposing new tariffs and reports suggested any new taxes would be imposed in a "measured" way.
* A weaker dollar makes gold more attractive for foreign buyers.
* Spot silver fell 0.5% to $30.34 per ounce, palladium dropped 1.2% to $933.25 and platinum shed 0.6% to $936.95.