Nov 27 2024: Gold prices edged higher during Asian trade on Wednesday, extending modest gains from the previous session as safe-haven demand remained supported by fears of increased U.S. trade tariffs under President-elect Donald Trump.
However, the strengthening U.S. dollar and easing geopolitical tensions in the Middle East capped further gains for the precious metal.
- Spot gold increased 0.3% to $2,40.16 an ounce.
- Gold futures for February delivery rose 0.7% to $2,665.41 an ounce as of 23:38 ET (04:38 GMT).
Trade Tariff Concerns Boost Gold Demand
Trump’s threat to impose additional tariffs on China, Canada, and Mexico has sparked fears of a renewed global trade conflict, driving investors toward safe havens like gold.
Analysts have cautioned that steep tariffs could slow global economic growth and raise U.S. inflation, which would likely lead to higher long-term interest rates.
While this scenario supports safe-haven demand, a stronger dollar—fueled by expectations of hawkish U.S. monetary policy—has restrained gold’s upside potential.
Middle East Tensions Subside
Gold’s appeal as a safe haven was further dampened by U.S. President Joe Biden’s announcement of a ceasefire between Israel and Hezbollah, signaling reduced geopolitical risks in the region.
Other Precious and Industrial Metals
- Silver futures gained 0.4% to $30.962 an ounce.
- Platinum futures rose slightly to $932.05 an ounce.
- Copper futures on the London Metal Exchange climbed 0.6% to $9,026.50 a ton, while February copper futures advanced 0.4% to $4.1463 a pound.
Trump Policies May Curb Gold Appeal – BofA
Bank of America analysts noted that Trump’s economic policies, expected to promote growth and strengthen the dollar, could limit demand for gold. His proposed corporate tax cuts and expansionary policies are likely to bolster U.S. economic performance, but they may also contribute to inflation and higher interest rates.
A stronger dollar and rising Treasury yields, supported by such policies, could weigh on gold prices.
Pressure on Industrial Metals
Industrial metals, particularly copper, faced pressure due to concerns over stricter U.S. trade policies toward China, the world’s largest importer of base metals.
Gold and other precious metals have struggled to recover from steep losses in November following Trump’s election victory, which has reshaped market expectations for U.S. economic and trade policy.
