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Gold prices edged higher in Asian trading on Tuesday, bolstered by a weaker U.S. dollar, as market participants turned their focus to policy uncertainties stemming from U.S. President Donald Trump’s inauguration.
Gold Shines as a Safe Haven Amid Policy Uncertainty
Spot gold rose 0.3% to $2,727.39 per ounce, while February gold futures gained 0.4%, reaching $2,743.57 per ounce by 01:28 ET (06:28 GMT). The precious metal has retained its safe-haven appeal, hovering near a one-month peak as traders brace for potential market volatility tied to Trump’s economic and trade policies.
Trump has signaled plans to impose new tariffs on key trading partners, including China, aiming to reduce the U.S. trade deficit. While such measures could strengthen the dollar in the long term, the initial uncertainty has dampened investor sentiment, boosting gold’s appeal.
The U.S. Dollar Index fell over 1% overnight, though it recovered slightly during Asian trading hours, rising 0.3%. Gold typically benefits from a weaker dollar, as it becomes more affordable for international buyers.
Mixed Sentiment for Precious and Industrial Metals
Other precious metals showed mixed performance on Tuesday. Silver futures rose 0.6% to $31.30 per ounce, while platinum futures dipped 0.4% to $958.80 per ounce.
In contrast, industrial metals, particularly copper, faced downward pressure. February copper futures fell 0.6% to $4.2910 per pound, while benchmark copper on the London Metal Exchange remained muted at $9,255.50 per ton.
Copper Pressured by Tariff Concerns
Copper prices struggled amid concerns over potential U.S. trade tariffs, which could disrupt global demand, especially from China, the world’s largest copper consumer. Historical precedents, such as heightened tariff disputes in 2018 and 2019, saw significant declines in copper prices as markets anticipated weaker demand.
Investors remain cautious as they assess the broader implications of Trump’s policies, particularly on global trade and economic growth. With industrial metals often seen as economic barometers, copper’s subdued performance underscores lingering concerns over the impact of tariffs and a potentially stronger dollar.
Outlook
As traders navigate an environment of policy-driven uncertainty, gold’s trajectory will likely remain tied to the interplay between U.S. trade actions, Federal Reserve policy, and dollar strength. Meanwhile, industrial metals may face continued headwinds unless clearer signals of demand recovery emerge, particularly from China.
