Gold prices have seen consistent growth over the past four weeks, with spot gold rising by 0.7% to $2,772.79 per ounce at 1:42 PM Eastern Time (18:42 GMT). This marks a 2.7% increase for the week, bringing gold within striking distance of its all-time high of $2,790.15 set on October 31. Meanwhile, US gold futures climbed 0.5% to $2,778.90 per ounce.
Analysts attribute this upward trend to a weakened US dollar, which has been significantly impacted by President Trump’s policies. Bart Melek, Head of Commodity Strategy at TD Securities, pointed out that Trump’s plans to raise tariffs are a key factor driving gold prices higher. “Trump poses a risk of further gold price hikes, and I think the gold market is factoring in the potential for higher inflation and a more accommodative central bank,” Melek noted.
Gold continues to be an attractive investment in uncertain times, especially as a hedge against inflation. With its zero-yield return, gold is particularly appealing in a low-interest-rate environment, offering a safe haven during periods of economic uncertainty.
At the World Economic Forum this week, President Trump called for an immediate interest rate cut, which sent the dollar index (DXY) to its lowest point in over a month. This decline in the dollar made gold more affordable for international buyers, further supporting the metal’s price increase.
Attention has now turned to February 1, when Trump is expected to announce new tariffs on goods from Mexico, Canada, China, and the European Union. Analysts from Standard Chartered noted that this announcement is currently overshadowing the upcoming January 29 Federal Reserve meeting.
In addition to the surge in gold prices, silver, platinum, and palladium also saw gains. Spot silver rose by 0.8% to $30.67 per ounce, platinum increased 0.6% to $948, and palladium edged up 0.1% to $992.75, reaching its highest level since November 25.
As market dynamics continue to evolve, traders are closely watching the Fed’s next moves and upcoming trade policy announcements, which will likely have a significant impact on the precious metals market.
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