International gold prices surge again
On January 21, international gold prices rose again and hit a two-month high. On the same day, the February gold futures price on the New York Mercantile Exchange rose 0.38% to close at $2,759.20 per ounce.
In this regard, several analysis agencies pointed out that investors flocked to gold mainly due to the increase in market risk aversion demand, and the decline of the US dollar also supported the gold price. Analysts at the foreign exchange trading platform FXStreet pointed out that the gold price showed an upward trend due to factors such as the weakening of the US dollar and Trump’s policy uncertainty.
On January 20, the day of Trump’s inauguration speech, the US dollar index fell sharply, hitting the largest single-day drop in a year. On January 21, the US dollar index continued to remain near the multi-day low of 108. Usually, in the financial market, the US dollar and gold prices show a negative correlation. The decline of the US dollar index provides support for gold and drives up gold prices.
On the other hand, global economic uncertainty is also an important factor in the rise in gold prices. Against the backdrop of a complex and changing global economic environment, investors’ preference for safe-haven assets such as gold has increased significantly. Especially in the context of geopolitical tensions and unclear trade relations, the safe-haven property of gold has become more prominent, attracting a large amount of capital inflows.
Looking ahead, analysts at FXStreet pointed out that the policy uncertainty of the Trump administration, especially its potential trade tariff policy, will continue to support gold prices. “Against the backdrop of increasing uncertainty and a weak dollar, gold will continue to play the role of a safe-haven asset. Therefore, gold prices still have the potential to rise further.”
Analysts at Standard Chartered Bank also said that gold prices will continue to be affected by Trump’s policies in the short term, but the long-term trend depends on the global economic situation and safe-haven demand. FXStreet analysts also pointed out the downside risks facing gold prices, saying that if US economic data continues to improve in the future, especially the strong performance of the job market, it may prompt the Federal Reserve to slow down the pace of interest rate cuts, thereby putting pressure on gold prices.