Gold prices reached a near four-week high on Thursday, buoyed by safe-haven demand as investors evaluated how the policies of U.S. President-elect Donald Trump might affect the economy and inflation.
- Spot gold increased by 0.3%, trading at $2,670.16 per ounce as of 10:55 a.m. ET (1555 GMT).
- U.S. gold futures rose 0.6% to $2,689.50 per ounce.
“Safe-haven demand is modestly supporting gold, offsetting downside pressure coming from a stronger dollar and higher rates,” said Giovanni Staunovo, UBS analyst.
Stronger Dollar and Treasury Yields
- The dollar index (.DXY) hovered near a one-week high, reducing gold’s appeal for holders of other currencies.
- Meanwhile, the 10-year Treasury yield stayed near an eight-month peak.
“Market uncertainty is likely to persist with the upcoming inauguration of Donald Trump as the next U.S. president,” Staunovo noted.
Impact of Trump’s Tariff Policies
Reports suggest Trump is considering a national economic emergency declaration to implement universal tariffs on U.S. allies and adversaries.
- Such policies could spark trade wars and inflation, potentially boosting demand for gold as a hedge against inflation.
- Trump is set to take office on Jan. 20, with investors closely monitoring his decisions.
Upcoming Nonfarm Payrolls Report
Market focus now shifts to Friday’s U.S. nonfarm payrolls report due at 8:30 a.m. ET.
- Analysts forecast a 160,000 job increase in December, following November’s 227,000 surge, according to a Reuters survey.
- A weaker-than-expected private employment report earlier this week hinted the Federal Reserve might be less aggressive with rate cuts in 2025.
Fed Concerns Over Inflation
Minutes from the Fed’s December policy meeting revealed concerns that Trump’s proposed tariffs and immigration policies could prolong inflationary pressures.
High interest rates traditionally reduce the appeal of gold, a non-yielding asset, but safe-haven demand has provided support.
World Gold Council Reports ETF Inflows
For the first time in four years, physically-backed gold exchange-traded funds registered inflows, according to the World Gold Council.
Other Precious Metals
- Silver rose 0.3% to $30.21 per ounce.
- Platinum fell 0.2% to $953.55 per ounce.
- Palladium shed 0.8%, trading at $920.75 per ounce.