Gold prices climbed to their highest level in nearly 11 weeks on Tuesday as the U.S. dollar slumped following President Donald Trump’s inauguration and investors sought the safe-haven metal to hedge against uncertainty sparked by his tariff plans.
Spot gold climbed 0.7% to $2,725.70 per ounce by 0804 GMT and hit its highest since Nov. 6, not far from an all-time high of $2,790.15 scaled in October.
U.S. gold futures were 0.4% lower at $2,738.40, narrowing the premium over spot rates, after Trump did not immediately impose tariffs on Monday as was expected.
Gold stocks in COMEX-approved (CME.O), opens new tab warehouses had jumped by one-third in the past six weeks as market players sought deliveries to hedge against Trump tariffs.
After weeks of global speculation over which duties Trump would impose on his first day in office, news that Trump would take more time on tariffs sparked relief in global stock markets but pressured the U.S. dollar.
“There is a sense of relief in risk sentiment to know that tariffs have not been an immediate focus. The unwinding of bets on imminent trade tensions is most evident in the U.S. dollar,” IG market strategist Yeap Jun Rong said.
“The mixed dynamics do see gold prices holding up for now and we may expect gold to remain an attractive hedge instrument. The $2,720 level will be an immediate resistance to watch.”
Trump, however, said he was thinking of imposing 25% tariffs on imports from Canada and Mexico from Feb. 1.
While gold is used as a safe investment in times of economic uncertainties, the degree to which the incoming administration implements Trump’s policy pledges will also significantly influence the future direction of U.S. interest rates.
Trump’s policies are seen as inflationary, which could lead the Federal Reserve to maintain rates higher for longer, weighing on gold as it yields no interest.
Spot silver was 0.1% lower at $30.45 per ounce. Palladium dipped 2% to $926.25 and platinum shed 0.6% to $936.45.
