Gold prices advanced during Asian trade on Tuesday, briefly touching 11-week highs of US$2,727.02. The rally comes amid heightened risk aversion sparked by President Donald Trump’s latest tariff threats, which have fuelled safe-haven demand in financial markets.
By 3:15 pm AEDT (4:15 am GMT) spot gold was up by $17.05 or 0.6% to US$2,724.90 per ounce.
In his remarks, Trump suggested imposing a 25% tariff on imports from Mexico and Canada, effective February 1st, and hinted at additional tariffs on the European Union to address trade deficits unless the bloc increases purchases of U.S. oil and gas.
Meanwhile, gold’s upside potential faces challenges as the U.S. dollar strengthened. As gold is priced in USD, a stronger dollar can weigh on the precious metal’s price.
Monday’s trading session saw gold initially retreat on easing tensions in the Middle East and pre-inauguration profit-taking. However, a dip in the U.S. dollar to a nine-day low during Trump’s inaugural address propelled gold back above $2,700.
A recent ceasefire in the prolonged Israel-Hamas conflict has also contributed to a stabilisation of geopolitical risks, adding to Monday’s earlier price movements.
