Gold Remains Stable as Markets Focus on Trump's Policies

21 Jan 2025 , 10:23 AM

As markets evaluated the potential effects of U.S. President Donald Trump’s plans in his second term following his inauguration, gold prices remained stable on Tuesday.

Spot gold was steady at $2,707.19 an ounce. At $2,730, U.S. gold futures fell 0.7%.

The announcement that Trump would take extra time on tariffs sparked a relief surge in global stocks and put pressure on the US currency following weeks of speculation about which duties Trump would impose tariffs on on his first day in office.

Trump has suggested imposing a 25% import fee on items from Canada and Mexico, as well as duties of up to 10% on imports from around the world and 60% on goods from China.

Although gold has historically been thought of as an inflation hedge, Trump’s plans are thought to be inflationary, which could cause the Fed to keep interest rates higher, which would reduce the appeal of gold.

The future course of U.S. interest rates will be greatly impacted by how well the next administration carries out Trump’s policy promises.

Bullion, which doesn’t yield, usually does well when interest rates are low.

After Trump refrained from enacting fresh tariffs and reports indicated that any new levies will be implemented in a “measured” manner, the dollar saw widespread losses.

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