- Summary
- Companies
- Trump took the oath of office at 12:01 p.m. ET
- U.S. markets closed for Martin Luther King Jr. Day holiday
- Gold hit over a month high last week
Jan 20 (Reuters) – Gold prices edged higher on Monday, bolstered by a weaker U.S. dollar, as markets assessed the potential economic impact of U.S. President Donald Trump‘s second-term policies following his inauguration.
Spot gold added 0.3% to $2,709.09 per ounce as of 1:49 p.m. ET (1849 GMT) with trading volumes thin due to the U.S. markets being closed for the Martin Luther King Jr. Day holiday.
U.S. gold futures fell 0.7% at $2,730.20, reducing the premium over the spot price, after a Trump administration official said that President Trump would issue a broad trade memo on his first day in office that stops short of imposing new tariffs.
The price spread between New York futures and spot prices was inflated in recent weeks as traders priced in possible U.S. import tariffs and boosted deliveries into the CME stocks.
“I believe Donald Trump (presidency) will result in higher market volatility, while some of his policies might keep inflation higher for longer. This should continue to support safe-haven assets like gold,” UBS analyst Giovanni Staunovo said.
Gold is used as a hedge against inflation, although Trump’s inflationary tariff policies could prompt the Federal Reserve to keep rates higher for longer, diminishing the non-yielding bullion’s appeal.
Trump has talked of tariffs of as much as 10% on global imports as well as 60% on Chinese goods and a 25% import surcharge on Canadian and Mexican products.
“Gold’s status as a financial asset makes it likely exempt from broad-based tariffs, and we therefore assign a 10% probability to a 10% effective tariff on gold being introduced within the next 12 months,” Goldman Sachs said.
Bullion hit its highest since Dec. 12, 2024, last week after cooler core inflation data, Fed Governor Waller’s dovish remarks and reports of gradual tariff introductions led traders to price in two rate cuts this year from just one earlier.
The dollar index (.DXY), opens new tab dropped 0.9%, making gold more attractive to foreign buyers.
Spot silver rose 0.7% to $30.52 per ounce, palladium shed 0.8% to $940.29 and platinum declined 0.2% to $940.70.
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Reporting by Daksh Grover and Sherin Elizabeth Varghese in Bengaluru, additional reporting by Swati Verma; Editing by Christina Fincher and Nick Zieminski
