Gold prices gain momentum from Trump's tariffs

Gold prices hit a more than 11-week high in afternoon trading on January 22, not far from last year's record, driven by safe-haven demand amid uncertainty over US President Donald Trump's trade policies and a weak US dollar.

Spot gold rose 0.3% to $2,751.89 an ounce at 12:02 (Vietnam time), after hitting its highest since November 1 earlier in the session, and nearing a record $2,790.15 an ounce set in October 2024. US gold futures also rose 0.3% to $2,768.40 an ounce.

There is still some uncertainty regarding the timing of Trump’s tariff plans with major US trading partners, which has created uncertainty about the direction of the US dollar, which is the main short-term catalyst for gold prices, said Kelvin Wong, senior market analyst for Asia Pacific at OANDA.

Gold’s appeal as an inflation hedge could be dented if Mr Trump’s policies, which are seen as inflationary, lead the US Federal Reserve to maintain high interest rates for a prolonged period. Higher interest rates reduce the appeal of gold, which does not pay interest.