Gold prices edge higher; demand boosted by Trump-inspired uncertainty

Gold prices edged higher Thursday, continuing the recent gains, as heightened uncertainty over a hawkish Federal Reserve and President-elect Donald Trump’s plan for trade tariffs fueled some safe haven demand.

At 06:15 ET (11:15 GMT), {68|Spot gold}} rose 0.4% to $2,683.84 an ounce, while gold futures expiring in February rose 0.3% to $2,668.60 an ounce. 

Trading activity is likely to be limited Thursday, with US traders on holiday to honor former President Jimmy Carter, with a state funeral due later in the session. Safe haven demand on economic uncertainty

Bullion prices benefited from some safe haven demand this week, as uncertainty over Trump’s trade and immigration policies dented risk appetite.

A CNN report said Trump could declare a national economic emergency to legally justify his plans to impose universal trade tariffs.

Concerns over Trump’s policies also came into focus after the minutes of the Fed’s December meeting showed policymakers expressing some concerns over sticky inflation.

Specifically, Fed officials were growing concerned that Trump’s expansionary and protectionist policies could underpin inflation in the long term.

The minutes also largely reiterated the Fed’s plans to cut interest rates at a slower pace in 2025, after the central bank effectively halved its projected rate cuts to two from four in 2025.

Treasury yields shot up after the Fed’s minutes, as did the dollar.

Higher for longer rates bode poorly for non-yielding assets such as metals, given that they increase the opportunity cost of investing in the sector. 

Other precious metals were edged higher Thursday. Platinum futures fell 0.1% to $983.85 an ounce, while silver futures rose 0.8% to $30.930 an ounce.  Copper rises as weak China inflation fuels stimulus hopes

Benchmark copper futures on the London Metal Exchange rose 0.7% to $9,093.0 a ton, while March copper futures rose 1.2% to $4.3115 a pound.

Chinese consumer prices were flat in December, while producer prices shrank for a 27th consecutive month, indicating little improvement in disinflation.

Inflation remained weak even as Beijing doled out its most aggressive round of stimulus measures through late-2024.

But Thursday’s inflation data fueled increased bets that Beijing will do more to shore up Chinese growth, especially on the fiscal front.

(Ambar Warrick contributed to this article.)

 

   

Among industrial metals, copper prices firmed as weak inflation data from top importer China spurred bets on more stimulus measures from Beijing. 

But metal markets remained under pressure from strength in the dollar, which came back in sight of over two-year highs on hawkish signals from the Fed. 

 

 

 

Source: Investing.com