Gold prices held steady on January 21, 2024, as global markets assessed the potential impact of US President Donald Trump’s policies following his inauguration. Spot gold remained flat at $2,707.19 per ounce, while US gold futures fell 0.7% to $2,730.
Markets had been eagerly awaiting Trump’s first moves on tariffs, and news that he would delay any immediate actions brought a relief rally in global stocks, which pressured the US dollar. Trump has proposed tariffs of up to 10% on global imports, with more significant duties of 60% on Chinese goods and a 25% surcharge on Canadian and Mexican products.
While gold is traditionally seen as a hedge against inflation, Trump’s policies, particularly the tariffs, are expected to be inflationary. This could lead the Federal Reserve to maintain higher interest rates, which may reduce gold’s appeal. Gold tends to perform better in a low-interest-rate environment, so the degree to which Trump’s administration follows through on its policy promises will play a key role in determining the future direction of US interest rates.
The US dollar experienced broad losses as Trump refrained from imposing new tariffs immediately, and reports suggested that any new taxes would be implemented in a “measured” manner. A weaker US dollar makes gold more attractive for foreign buyers, which supported its price stability.
Meanwhile, other precious metals showed declines: 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.
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