GOLD prices edged higher and were on track for a fourth straight weekly gain on Friday (Jan 24), as uncertainty about US President Donald Trump’s trade plans took wind out of the US dollar’s sail, boosting demand for the safe-haven asset.
Spot gold edged up 0.2 per cent to US$2,760.40 per ounce, as at 0044 GMT and gained over 2 per cent so far this week. US gold futures added 0.1 per cent to US$2,767.60.
The US dollar was lower on Thursday in a choppy session, after comments from Trump called for an immediate drop in interest rates while providing no clarity on tariffs, while investors awaited a round of policy announcements from global central banks.
The Bank of Japan is widely expected to raise interest rates at the end of a two-day meeting on Friday. Rate decisions from the US Federal Reserve and European Central Bank (ECB) are scheduled for Wednesday and Thursday of next week, respectively.
Traders see a 99.5 per cent chance of the Fed keeping rates unchanged at its Jan 28 to 29 meeting, according to the CME Group’s FedWatch Tool. Higher rates dampen the appeal of the non-yielding bullion.
Gold’s appeal as an inflation hedge may be diminished if Trump’s policies, which are seen as inflationary, lead the Fed to maintain interest rates higher for longer.
Uncertainty about Trump’s trade plans prevailed as he said tariffs on imports from Canada, Mexico, China and the European Union could be announced on Feb 1.
Lack of clarity about future policies has led market participants flocking to safe-haven assets such as gold to hedge against volatility.
Spot silver was up 0.1 per cent to US$30.47 per ounce, palladium gained 0.2 per cent to US$993.46 and platinum rose 0.4 per cent to 945.85. REUTERS
Share with us your feedback on BT’s products and services
