Gold prices rose for a second straight session on Tuesday, but traded below the recent all-time highs, as uncertainty around U.S. President Donald Trump’s tariff plans continued to fuel economic growth concerns and safe haven flows into bullion.
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“Trump’s disruptive modus operandi, aggressive rhetoric and tariffs – whether actual or threatened – could unravel global trade and intricate supply chains,” said Nikos Tzabouras, senior financial writer at trading platform Tradu.
“With uncertainty surrounding the global economy and the broader geopolitical landscape in the Trump 2.0 era, gold is set to remain a natural beneficiary of risk-off flows and central bank buying.”
Since taking office last month, Trump has swiftly redrawn the global trade battlefield with a series of tariffs, while plans are already in motion for sweeping reciprocal tariffs, aimed squarely at any nation that taxes U.S. products.
“Gold continues to benefit from the uncertainty surrounding the U.S. government’s tariff policy. Central bank buying should also continue to provide support, even if there is no new data on this,” Commerzbank analysts said in a note.
The market’s focus has now shifted to the U.S. Federal Reserve’s January meeting minutes due on Wednesday for clues into the central bank’s interest rate trajectory.
“Price gains are also supported by growing expectations that the Fed will cut rates in 2025 – a sentiment that gained further traction among traders after last week’s disappointing U.S. retail sales figures,” Ricardo Evangelista, senior analyst at brokerage firm ActivTrades, said.
Bullion benefits from geopolitical and economic uncertainties, as well as rising price pressures, but higher interest rates diminish the asset’s allure.
