Gold Surges to Near-Record High as Dollar Weakness Persists
Amidst escalating geopolitical tensions and a weakening dollar, gold prices soared to near-record levels. Following President Donald Trump's signals of a tempered stance towards China, the precious metal surged to $2,770 an ounce, inches from its all-time high set in October.
The dollar's decline, reaching a drop of 0.7%, made gold more affordable for global buyers. Gold has surged by 3% this week, largely driven by haven demand amid global economic uncertainties under the new US administration. Tariffs are expected to benefit gold despite accompanying dollar strength, according to UBS strategist Joni Teves.
President Trump's comments on trade and tariffs have been closely monitored by traders. The president has targeted China, the EU, Canada, and Mexico for import levies, sparking concerns over retaliation. During a video address to the World Economic Forum in Davos, Trump threatened import levies on Europe to incentivize domestic manufacturing.
Traders are now focusing on Trump's domestic agenda, including tax and immigration reforms, which may impact the nation's fiscal health and rekindle inflation. As the Federal Reserve's rate decision next week looms, gold is poised to remain in demand as a safe haven and portfolio diversifier amid volatility and macro uncertainty.