Jan 22 (Reuters) – Prices of safe-haven gold rose to a near three-month high on Wednesday, boosted by uncertainty surrounding U.S. President Trump’s policies and a softer dollar.
Spot gold added 0.6% to $2,759.83 per ounce as of 0941 GMT. The price hit its highest since Nov. 1 earlier in the session and is close to its record peak of $2,790.15 hit in October.
U.S. gold futures gained 0.4% to $2,771.10.
Spot silver rose 0.1% to $30.89, hovering near a one-month high hit on Jan. 16.
The dollar index is hovering around a two-week low hit earlier in the week. A weaker dollar makes gold more attractive for holders of other currencies.
“Gold and silver prices have both benefited from the increased uncertainty caused by Trump announcements, including tariffs, with investors also evaluating their inflationary impact and effects on monetary policies,” said Ole Hansen, head of commodity strategy at Saxo Bank.
“In the coming days and weeks, the precious metal market will be held hostage to the ebb and flow of news from Washington.”
Trump vowed to impose tariffs on the EU and said his administration is considering a 10% tariff on Chinese imports due to fentanyl being trafficked from China to the U.S. via Mexico and Canada.
Gold’s appeal as an inflation hedge may decline if Trump’s inflationary policies prompt the Federal Reserve to keep interest rates higher for longer, as it is a non-yielding asset.
As per a slim majority of economists polled by Reuters, the U.S. central bank will hold rates steady on Jan. 29.
“Central bank purchases set a strong demand base (for gold), but we expect investment demand to lift, offsetting losses in physical demand,” ANZ said in a note.
Platinum climbed 0.3% to $946.43 and palladium added 0.4% to $961.00.
