Gold prices climbed to an 11-week high on Wednesday, marking a third consecutive session of gains as demand for safe-haven assets surged. Spot gold rose 0.2% to $2,749.29 per ounce, while gold futures gained to $2,766.57 an ounce. The rise reflects growing caution among traders navigating uncertainty surrounding President Donald Trump’s trade policies.
Gold benefits from inflation concerns
Gold is often seen as a hedge against inflation, and Trump’s latest tariff threats have elevated inflationary concerns. On Tuesday, Trump announced plans to impose 10% tariffs on Chinese imports starting February 1, with similar measures targeting the European Union. These policies are expected to increase trade imbalances and inflation, which have historically supported gold prices.
Dollar dynamics and gold prices
The US dollar, which typically moves inversely to gold, showed mixed signals. While the dollar index rose slightly by 0.2% on Wednesday, its sharp decline earlier this week as Trump avoided detailing tariffs also contributed to gold’s recent rally. A stronger dollar generally makes gold more expensive for international buyers, but ongoing market uncertainty is keeping the precious metal in demand.
What’s next for gold?
As traders closely monitor Trump’s tariff announcements and their potential impact on global markets, gold’s trajectory will likely remain influenced by safe-haven demand and inflation expectations. For now, the precious metal appears well-supported amid these uncertain times, offering traders and investors a hedge against market volatility.
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