Gold firms on softer dollar

Gold prices firmed on Monday, supported by a weaker US dollar, as markets awaited Donald Trump’s return to the White House and his inauguration speech later in the day for hints on the impact of his policies on the economy.

Spot gold added 0.3% to $2,708.29 per ounce as of 1545 GMT.

US gold futures fell 0.7% at $2,729.20, with trading volumes thin due to the U.S. markets being closed for the Martin Luther King Jr. Day holiday.

A line chart titled “Spot gold price in USD per oz” that tracks the metric over time.
Trump will be sworn in at noon ET (1700 GMT).

“I believe Donald Trump (presidency) will result in higher market volatility, while some of his policies might keep inflation higher for longer. This should continue to support safe-haven assets like gold,” UBS analyst Giovanni Staunovo said.

Gold is used as a hedge against inflation, although Trump’s inflationary tariff policies could prompt the Federal Reserve to keep rates higher for longer, diminishing the non-yielding bullion’s appeal.

Trump has talked of tariffs of as much as 10% on global imports as well as 60% on Chinese goods and a 25% import surcharge on Canadian and Mexican products.

“Gold’s status as a financial asset makes it likely exempt from broad-based tariffs, and we therefore assign a 10% probability to a 10% effective tariff on gold being introduced within the next 12 months,” Goldman Sachs said.

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Bullion hit its highest since Dec. 12, 2024, last week after cooler core inflation data, Fed Governor Waller’s dovish remarks and reports of gradual tariff introductions led traders to price in two rate cuts this year from just one earlier.

The dollar index dropped 1%, making gold more attractive to foreign buyers.

Spot silver rose 0.4% to $30.46 per ounce, palladium shed 1% to $938.25 and platinum declined 0.2% to $940.40.