MUMBAI, 22 Jan (Commoditiescontrol): Gold prices surged to their highest levels in nearly three months on Wednesday, as uncertainty surrounding U.S. President Donald Trump's policies and a softer dollar drove demand for the safe-haven asset.
Spot gold rose 0.6% to $2,759.83 per ounce, reaching its highest point since November 1 and inching closer to the record high of $2,790.15 set in October. U.S. gold futures also gained, rising 0.4% to $2,771.10 per ounce.
Silver prices followed a similar trend, with spot silver edging up 0.1% to $30.89 per ounce, near the one-month high reached on January 16.
The dollar index remained around a two-week low, further supporting gold. A weaker dollar enhances gold’s appeal for investors holding other currencies, as it becomes relatively cheaper.
The market’s focus on Trump’s recent announcements, including potential tariffs on the European Union and a proposed 10% tariff on Chinese imports, has heightened investor uncertainty. The U.S. president linked the tariff proposal to concerns over fentanyl trafficking from China to the U.S. via Mexico and Canada.
While gold is seen as an inflation hedge, its appeal could diminish if the Federal Reserve maintains higher interest rates in response to inflationary pressures stemming from Trump’s policies. Gold, being a non-yielding asset, often faces competition from interest-bearing alternatives during periods of high rates.
Market expectations suggest that the Federal Reserve will likely hold interest rates steady in its January 29 meeting, as indicated by a Reuters poll of economists.
Among other precious metals, platinum rose 0.3% to $946.43, and palladium added 0.4% to $961.00. These metals, often used in the automotive sector, continue to see modest gains.
The continued rise in gold and silver prices reflects the ongoing demand for safe-haven assets as investors navigate economic and geopolitical uncertainties in the global landscape.
(By Commoditiescontrol Bureau; +91 98201 30172)
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