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Gold Prices Rise on Trade Uncertainty, Dollar Weakness

24 Jan 2025 8:53 am
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Mumbai, 24 Jan (Commoditiescontrol): Gold prices edged higher on Friday, marking their fourth consecutive weekly gain as uncertainties surrounding U.S. President Donald Trump’s trade policies weighed on the dollar, boosting the appeal of safe-haven assets.

Spot gold rose by 0.2% to $2,760.40 per ounce and recorded a weekly gain of over 2%. U.S. gold futures also climbed, adding 0.1% to $2,767.60. Meanwhile, the dollar faced a volatile session on Thursday after Trump called for an immediate cut in interest rates but failed to provide clear direction on trade tariffs.

Market participants are closely watching global central banks for policy signals. The Bank of Japan is expected to announce its interest rate decision on Friday, while the U.S. Federal Reserve and European Central Bank (ECB) are set to reveal their decisions next week. According to the CME Group’s FedWatch Tool, traders see a 99.5% likelihood that the Federal Reserve will maintain its current interest rates at its January 28–29 meeting.

Higher interest rates typically reduce the appeal of gold, which does not yield returns. However, Trump’s trade policies, which are perceived as inflationary, may prompt the Federal Reserve to keep rates higher for an extended period, potentially diminishing gold’s role as an inflation hedge.

Adding to market jitters, Trump indicated that tariffs on imports from Canada, Mexico, China, and the European Union could be announced as early as February 1. This lack of clarity has driven investors toward gold and other safe-haven assets to shield themselves from potential volatility.

China's production of gold using domestic raw materials climbed by 0.56% to 377.242 metric tons in 2024, China Gold Association data showed on Friday. Meanwhile, China's gold consumption last year slipped 9.58% on the year to 985.31 tons, according to data from the stated-backed association.

In other precious metals, spot silver edged up 0.1% to $30.47 per ounce, while palladium and platinum gained 0.2% and 0.4%, reaching $993.46 and $945.85 per ounce, respectively. All three metals were on track for weekly gains, reflecting sustained demand amid global uncertainties.

(By Commoditiescontrol Bureau: 09820130172)


       
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