Investing.com— Gold prices held steady on Monday as traders awaited US President-elect Donald Trump’s inauguration speech, hoping for clues regarding his administration’s policies and hints about future interest rates.
As of 07:40 ET (12:40 GMT), gold climbed 0.3% to $2,708.70 per ounce, while February futures dipped slightly to $2,748.19 an ounce.
Traders Prepare for Fluctuations with Trump’s Second Term
Gold traders are preparing for potential volatility as Trump starts his second term, with expected policy announcements that could significantly affect market dynamics.
The precious metal, typically regarded as a safe haven, has managed to stabilize near a one-month high, supported by weak US inflation data that has fueled expectations of further Federal Reserve interest rate cuts.
Current market sentiment is influenced by expected US policy changes and the Federal Reserve’s monetary stance. Analysts indicate that a strong start to Trump’s term could bolster the dollar, while a more cautious approach might weaken it, impacting gold prices accordingly.
The dollar was 0.3% weaker on Monday, contributing to support for gold.
A declining dollar generally elevates gold prices, as it makes the metal less expensive for buyers using other currencies.
Furthermore, recent data suggesting reduced price pressures has led investors to expect a more accommodating monetary policy, which typically benefits gold prices.
Despite these supportive factors, gold’s upward movement has faced headwinds from geopolitical situations, such as the ceasefire agreement between Israel and Hamas, which can affect the demand for safe-haven assets.
As the market navigates these complexities, traders remain alert, closely watching Trump’s actions to gauge their influence on gold’s price trajectory.
Other precious metals experienced limited movement, with silver declining 0.3% to $962.70 per ounce, and platinum also falling 0.3% to $31.062 per ounce.
Copper Prices Under Pressure from Trade Tariff Worries
In the realm of industrial metals, copper prices were muted as concerns over potential US tariffs, expectations of a stronger dollar, and investor caution ahead of Trump’s inauguration weighed heavily on the market.
Although China has ramped up imports and inventory levels are decreasing, which has given some support to copper prices, traders remain cautious.
Historically, during periods of heightened tariffs and trade tensions, such as mid-2018 and mid-2019, copper prices have dropped sharply as investors predicted reduced demand from China, the largest consumer of copper.
The benchmark price on the London Metal Exchange fell 0.3% to $9,165.00 per ton, while February futures also edged down 0.3% to $4.3540 per pound.
(Peter Nurse contributed to this article.)
