Gold Prices Rise Amid Risks from Trump’s Upcoming Policies
Gold prices climbed on Wednesday, bolstered by the risks associated with incoming U.S. President Donald Trump’s plans to impose new tariffs, while investors eagerly await more economic data to predict the Federal Reserve’s stance on interest rates this year.
Spot gold rose by 0.2% to $2,653.35 per ounce by 0928 GMT. U.S. gold futures also edged up by 0.1% to $2,667.20.
Ole Hansen,
Head of Commodity Strategy at Saxo Bank, stated that Trump’s potential to ignite a trade war, ongoing inflation concerns, and fears about financial stability with rising U.S. Treasury yields are current and prospective factors that might enhance risks, thereby supporting gold prices.
Trump is set to be inaugurated as the U.S. President on January 20. The tariffs and protectionist trade policies he proposes are expected to increase inflation and could spark trade wars, enhancing gold’s appeal as a safe haven.
Gold is also used as a hedge against inflation, although higher interest rates reduce the allure of
holding the non-yielding yellow metal.
The market is waiting for employment data from ADP and the minutes from the Federal Reserve’s
December meeting, both due out later in the day, alongside the U.S. non-farm payrolls report
scheduled for Friday, which might provide further insights into U.S. monetary policy direction.
Tuesday’s data showed an increase in U.S. job opportunities in November, while the
unemployment rate decreased, suggesting a labor market slowdown that might not compel the
Federal Reserve to rush into cutting rates.
After the U.S. central bank cut interest rates three times in 2024, it forecasted only two rate cuts
for 2025 in December. Markets are now anticipating a cut of around 38 basis points this year.
On the precious metals front, silver in spot transactions increased by 0.4% to $30.14 per ounce,
platinum rose by 0.1% to $951.40, while palladium held steady at $924.25.
This article reflects the latest trends in gold pricing influenced by anticipated policy shifts,
providing investors with insights into how macroeconomic factors could shape commodity
markets.
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