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Home»Finance»Gold Hits Record High on Weak Dollar as Trump Tariff Risks Loom
Finance

Gold Hits Record High on Weak Dollar as Trump Tariff Risks Loom

January 31, 2025No Comments3 Mins Read
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Gold Hits Record High on Weak Dollar as Trump Tariff Risks Loom
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(Bloomberg) — Gold hit a brand new all-time excessive because the greenback pushed decrease and merchants sought security amid considerations over President Donald Trump’s tariff measures.

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Bullion surged as a lot as 1.4% to $2,798.59 an oz, surpassing its earlier all-time excessive set in October. A weaker greenback makes bullion extra interesting for traders holding different currencies because it’s priced within the US foreign money.

The softness within the dollar got here after a broadly anticipated price minimize by the European Central Financial institution and the most recent information that confirmed inflation-adjusted gross home product within the US elevated an annualized 2.3% within the fourth quarter after rising 3.1% within the prior three-month interval.

The valuable steel has been buying and selling in a uneven vogue for the reason that US elections, with Trump’s decisive victory initially sparking a selloff as traders flocked to riskier property linked to his pro-growth agenda. But it surely has clawed again floor in latest weeks, because the president’s repeated threats on tariffs reginited haven demand.

“You might have the uncertainty of what’s going to occur with Trump, together with his insurance policies and tariffs and issues like that might impression the expansion of the USA,” stated Phil Streible, chief market strategist at Blue Line Futures. “If you get rising inflation and also you get declining progress, you get stagflation, then gold is without doubt one of the best-performing commodities in that atmosphere.”

“I feel that’s what folks have been positioning for. There’s renewed power, renewed need to be concerned with that product,” stated Streible.

Trump’s insurance policies are broadly seen by economists as fanning inflation and probably hurting financial progress. Federal Reserve Chair Jerome Powell stated Wednesday the US central financial institution was in a “wait-and-see” mode with regard to the potential impression of the brand new administration’s insurance policies.

Powell and his friends on the Federal Open Market Committee held rates of interest regular at their first assembly of the yr, including that they gained’t rush to decrease charges as they’re ready to see additional progress on inflation.

Whereas Trump’s plans are nonetheless unclear, he set a deadline of Saturday for tariffs of 25% on Mexico and Canada, and has additionally stated he intends to impose across-the-board levies which can be “a lot greater” than the two.5% determine beforehand recommended by Treasury Secretary Scott Bessent.

Fears of the impression have already jolted the valuable metals markets, with US costs of gold and silver surging above their worldwide benchmarks lately and sellers and merchants speeding to maneuver the metals into the US earlier than any tariffs are imposed.

Ongoing worries over swelling US debt additionally make bullion interesting for traders, and plenty of analysts see the rally persevering with this yr as central banks search to diversify their reserves and scale back their dependence on the greenback.

Spot gold rose 1.2% to $2,791.79 an oz as of 12:25 p.m. in New York.

–With help from Sybilla Gross and Jack Ryan.

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©2025 Bloomberg L.P.

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