Gold holds steady as markets focus on Trump’s policies

GOLD prices steadied on Tuesday (Jan 21) as markets evaluated the possible consequences of US President Donald Trump’s policies in his second term after his inauguration.

Spot gold was flat at US$2,707.19 per ounce by 0107 GMT. US gold futures dipped 0.7 per cent to US$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 US dollar.

Trump has proposed tariffs of up to 10 per cent on global imports, 60 per cent on Chinese goods, and a 25 per cent 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 US interest rates.

The non-yielding bullion tends to thrive in a low-interest rate environment.

The US 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 US dollar makes gold more attractive for foreign buyers.

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Spot silver fell 0.5 per cent to US$30.34 per ounce, palladium dropped 1.2 per cent to US$933.25 and platinum shed 0.6 per cent to US$936.95. REUTERS