Gold Prices Hold Steady Amid Dollar Decline and Trade Tariff Speculation
Gold prices remained relatively stable during Tuesday’s Asian trading session, as investors weighed the potential impact of additional trade tariffs under U.S. President-elect Donald Trump. Despite the uncertainty surrounding U.S. trade policies, a recent decline in the dollar provided some relief to gold prices.
Throughout December, gold prices faced losses, mainly due to profit-taking and positioning for a slower pace of interest rate cuts by the Federal Reserve in 2025. A strong U.S. dollar had exerted downward pressure on gold, reaching its highest level in over two years. However, the dollar saw a pullback on Monday, which allowed gold prices to recover slightly.
By 23:30 ET (04:30 GMT), spot gold rose 0.1% to $2,638.05 per ounce, while February gold futures saw a 0.1% increase to $2,649.19 per ounce.
Tariff Speculation and Trump’s Trade Policies
On Monday, President-elect Trump denied a report from The Washington Post that his administration would only target critical imports with trade tariffs. Trump has consistently pledged to impose significant import tariffs, particularly to assert U.S. trade dominance over China. This statement, along with the uncertainty regarding his policies, stirred speculation about the future of global trade. Following the news, the dollar dipped to a one-week low before recovering a significant portion of its losses.
Although the dollar’s weakness provided limited relief to gold, the precious metal continued to face challenges. Investors remained cautious about the possibility of a slower pace of interest rate cuts by the Federal Reserve, with hawkish comments from Fed officials further fueling this sentiment.
Goldman Sachs also dampened expectations for gold’s immediate future, forecasting that the metal would reach $3,000 per ounce only by mid-2026, following its inability to reach that target in 2024. The investment bank projected that gold would end 2025 at approximately $2,900 per ounce. Higher interest rates typically present challenges for gold, as they increase the opportunity cost of holding the non-yielding asset.
Precious Metals Market Overview
On Tuesday, other precious metals exhibited mixed performance. Platinum futures rose 0.4% to $949.50 per ounce, while silver futures held steady at $30.573 per ounce.
Copper Prices Stabilize with Focus on China’s Economic Stimulus
Among industrial metals, copper prices showed signs of stabilization after gaining ground earlier in the week. This increase was driven by expectations of more economic stimulus measures from China, the world’s top copper importer.
Benchmark copper futures on the London Metal Exchange rose 0.2% to $8,983.50 per ton, while March copper futures remained steady at $4.1540 per pound. Investors are hopeful that worsening economic conditions, coupled with U.S. trade tensions, will prompt China to implement more aggressive stimulus actions to support its growth.
Consumer price index (CPI) inflation data due later this week will provide further insights into China’s economic situation. Outside of China, copper prices were affected by mixed signals from purchasing managers’ index (PMI) data from the U.S. and the eurozone, which indicated subdued business activity in December.
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Disclaimer: This text constitutes marketing communication. It is not any form of investment advice or investment research or an offer for any transactions in financial instrument. Its content does not take into consideration individual circumstances of the readers, their experience or financial situation. The past performance is not a guarantee or prediction of future results.
