Gold price today: It appears that investors around the world are parking their investments in safe-haven assets like gold, as they did in the previous calendar year as fresh concerns over Donald Trump’s tariff plans and elevated stock valuations are prompting them to exit risky assets in 2025, putting equity markets under significant pressure.
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From West to East, major markets have been under pressure in recent weeks, especially after Donald Trump returned to the White House to begin his second term as U.S. President on January 20. As soon as he took office, he wasted no time implementing his ‘Make America Great Again’ agenda, pushing forward with policies aimed at reshaping trade, immigration, and taxation.
Concerns over his economic policies, which aim to benefit American corporations and citizens, have sparked fears of potential trade wars. This has driven investors to park their funds in gold, resulting in a sharp rise in prices.
Additionally, prices have found support from the drop in interest rates, as major central banks around the world are expected to continue their dovish monetary policies in 2025. Donald Trump has also insisted that interest rates be cut quickly and that other nations should follow suit.
Moreover, central banks continue to buy huge quantities of gold as a way to diversify their forex holdings away from the US dollar, which is also supporting the prices.
Spot gold prices have jumped 4.39% in January so far, reaching $2,739 per ounce. In the domestic market, prices on the MCX have crossed the ₹80,000 mark to hit an all-time high of ₹80,312 per gram on Friday. In the current month so far, prices have gained 4.03%. Despite an approximately 27% rally last year, the precious metal has had a strong start to the year.
If prices maintain their momentum and end January with a gain of over 4.20%, it will mark the best monthly performance for the yellow metal since September 2024.
Trump tariff threat
Dr Renisha Chainani, Head of Research at Augmont, said, “By February 1, 2025, Trump, the self-described “Tariff Man,” intends to levy 25% tariffs on Canada and Mexico. Additionally, he threatened to impose broad, universal tariffs on all imports entering the United States, thereby starting an economic war with the rest of the globe.”
Chainani also pointed out that the dollar’s decline, in response to Trump’s comments about softening tariffs and accepting a trade agreement with China, has coincided with gold’s ascent to a new all-time high. Trump stated earlier this week that if an agreement on Ukraine is not achieved, he would probably slap further penalties, levies, and tariffs on Russia.
Because of the uncertainty around the effects of Trump’s proposed tariffs and immigration policies, traders continued to gravitate toward safe-haven assets.
Rate cut expectations
“Tax cuts, deregulation, and interest rate reductions are the three primary pillars of Trump’s strategy, which aims to lower costs for both consumers and corporations. Many economists and investors believe that Trump’s intention to deport a substantial number of undocumented immigrants and his pursuit of large-scale tariffs on America’s trade partners—which are effectively levies on imports—run a danger of rekindling inflation pressures,” noted Chainani.
Amidst signs of reducing inflationary pressures in the US, Chainani highlighted that the markets have begun to factor in the potential for the U.S. central bank to cut interest rates twice before the end of this year.
Meanwhile, the US Federal Reserve’s two-day policy meeting will begin later today. With the central bank expected to keep interest rates steady, focus will be on Fed Chair Jerome Powell’s speech and how the central bank will respond to President Donald Trump’s calls for interest rate reductions.
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