Gold Gains as Dollar Dips; Trump's Tariff Plans in Focus
Gold prices rose for a second session on Tuesday as the dollar weakened, with markets evaluating the possible consequences of U.S. President Donald Trump's policies in his second term after his inauguration.
Spot gold gained 0.6% to $2,724.74 per ounce by 0240 GMT. U.S. gold futures was 0.2% lower at $2,742.50.
The dollar (.DXY), was down about 1% after reports suggested any new taxes would be imposed in a "measured" way. A weaker dollar makes gold more attractive to foreign buyers.
After weeks of global speculation over which duties Trump would impose tariffs on his first day in office, news that Trump would take more time on tariffs drove a relief rally in global stocks and pressured the U.S. dollar.
Trump had proposed tariffs of up to 10% on global imports, 60% on Chinese goods, and a 25% import surcharge on Canadian and Mexican products.
While gold is traditionally viewed as an inflation hedge, Trump's policies are seen as inflationary which could lead the Federal Reserve to maintain higher interest rates, affecting gold's appeal.
The degree to which the incoming administration implements Trump's policy pledges will significantly influence the future direction of U.S. interest rates.
The non-yielding bullion tends to thrive in a low-interest rate environment.
Spot silver added 0.4% to $30.61 per ounce. Palladium dropped 1.2% to $933.25 and platinum shed 0.1% to $941.30.
Source : Reuters
