Gold firms near four-week peak on safe-haven demand
Gold prices hovered near a four-week high on Thursday, supported by safe-haven demand, while investors pondered about how U.S. President-elect Donald Trump's policies would impact the economy and inflation.
Spot gold inched up 0.1% to $2,663.34 per ounce, as of 0926 GMT. U.S. gold futures rose 0.3% to $2,679.60.
"Safe haven demand is modestly supporting gold, offsetting downside pressure coming from a stronger dollar and higher rates," UBS analyst Giovanni Staunovo said. The dollar index (.DXY), opens new tab hovered near one-week high, making gold less appealing for other currency holders, while Treasury yield stayed near eight-month peaks.
"Market uncertainty is likely to persist with the upcoming inauguration of Donald Trump as the next U.S. president," Staunovo said.
Trump is considering declaring a national economic emergency to provide legal justification for a series of universal tariffs on allies and adversaries, CNN reported on Wednesday, citing sources familiar with the matter.
Trump will take office on Jan. 20 and his proposed tariffs could potentially ignite trade wars and inflation, posing a significant economic risk. In such a scenario, gold, considered a hedge against inflation, is likely to perform well.
Investors' focus now shifts to Friday's U.S. nonfarm payrolls for further clarity on the Federal Reserve's interest rate path.
Non-farm payrolls likely rose by 160,000 jobs in December after surging by 227,000 in November, a Reuters survey showed.
Trump will take office on Jan. 20 and his proposed tariffs could potentially ignite trade wars and inflation, posing a significant economic risk. In such a scenario, gold, considered a hedge against inflation, is likely to perform well.
Investors' focus now shifts to Friday's U.S. nonfarm payrolls for further clarity on the Federal Reserve's interest rate path.
Non-farm payrolls likely rose by 160,000 jobs in December after surging by 227,000 in November, a Reuters survey showed.
Source: Reuters
