Supported by a weaker dollar, gold prices rose on Monday, with spot gold increasing by 0.3% to $2,709.09 per ounce. However, trading volume was sparse due to the U.S. market closure for Martin Luther King Jr. Day. Meanwhile, U.S. gold futures fell by 0.7%, reported at $2,730.20 per ounce, narrowing the spread with spot gold prices.
A government official from President Trump's administration stated that Trump would release a comprehensive trade memorandum on the first day of his term but will not introduce new tariff policies immediately. This announcement somewhat eased market concerns about higher tariffs, causing the spread between New York futures and spot prices to slightly retreat from recent highs.
Market Dynamics and Analysis
UBS analyst Giovanni Staunovo indicated that Trump's policies might increase market volatility, and some potential economic policies could maintain a higher inflation rate over a prolonged period. This expectation of inflation is seen as likely to continue supporting demand for safe-haven assets like gold.
Additionally, following the slowdown in core inflation data and dovish comments from Federal Reserve Governor Waller, the market expects the Fed to cut interest rates twice this year instead of once. This backdrop led to gold prices reaching their highest level since December 12, 2024, last week.
Performance of Other Precious Metals
Silver prices increased by 0.7% to $30.52 per ounce. Palladium dropped by 0.8% to $940.29 per ounce, while platinum edged down by 0.2% to $940.70 per ounce.
As the market assesses the policy directions of the new U.S. administration and their impact on global trade and the economy, the price volatility of gold and other precious metals is expected to remain in focus.
