Gold Rises as Trump Tariff Uncertainty Fuels Safe-Haven Demand

Gold prices experienced a notable increase on Tuesday, driven by growing concerns over global economic growth and the uncertainty surrounding U.S. President Donald Trump’s tariff plans. These factors prompted investors to seek the safety of bullion, leading to a rise in demand for the precious metal.

• Spot gold rose by 0.9% to 2,923.89perounceasof09:32a.m.ET(1432GMT),followingarecordhighof2,923.89perounceasof09:32a.m.ET(1432GMT),followingarecordhighof2,942.70 reached last week.
• U.S. gold futures also saw a significant increase, climbing 1.4% to $2,940.30.

Jim Wyckoff, a senior market analyst at Kitco Metals, attributed the rise in gold prices to increased safe-haven demand due to the unpredictable nature of the Trump administration. He also noted the bullish chart posture of gold, which has further supported its upward trend.

Since taking office last month, President Trump has rapidly reshaped the global trade landscape by implementing a series of tariffs. Additionally, plans are underway for reciprocal tariffs targeting nations that impose taxes on U.S. products. These actions have created a climate of uncertainty, prompting investors to turn to gold as a safe-haven asset.

Commerzbank analysts highlighted that central bank buying of gold is expected to continue providing support to the market. This ongoing demand from central banks adds another layer of stability to gold prices.

The market’s attention has now shifted to the upcoming release of the U.S. Federal Reserve’s January meeting minutes, scheduled for Wednesday. Investors are keen to glean insights into the central bank’s interest rate trajectory. Jim Wyckoff suggested that if the economy begins to falter due to trade tariffs, the Federal Reserve might consider lowering interest rates, which could further bolster gold prices.

Gold is known to benefit from geopolitical and economic uncertainties. It thrives in a low-interest-rate environment, as it does not yield interest, making it an attractive option for investors seeking stability.

Fawad Razaqzada, a market analyst at City Index and FOREX.com, cautioned that while the broader trend for gold remains positive, the risk of a deeper pullback cannot be ignored at current elevated levels. He suggested that for gold to reach new highs, there may need to be an escalation in geopolitical risks, particularly concerning Ukraine.

• Spot silver fell by 0.7% to $32.57 per ounce.
• Platinum rose by 0.8% to $983.20.
• Palladium climbed by 1.8% to $979.60.

In summary, gold prices have risen as uncertainty surrounding President Trump’s tariff plans and concerns over economic growth have driven investors towards safe-haven assets. The market remains watchful of the Federal Reserve’s upcoming meeting minutes and potential geopolitical developments that could further influence gold’s trajectory.