On January 22, 2025, gold prices reached an 11-week high of $2,748.18 per ounce, driven by safe-haven demand amid uncertainty surrounding U.S. President Donald Trump's trade policies and a weakening dollar. U.S. gold futures also rose to $2,762.90, reflecting a strong market response to these developments. Analyst Kelvin Wong from OANDA highlighted that the uncertainty regarding Trump's trade policy direction is a significant factor influencing the dollar's value. Notably, Trump delayed imposing trade barriers on his first day in office, which contributed to the dollar's decline. He is expected to implement a 10% tariff on Chinese goods starting February 1, 2025, further impacting market dynamics. [a376f272]
Prior to this surge, on January 21, gold prices had already climbed to $2,722.83 per ounce, marking the highest level since November 6, 2024. This increase was also influenced by a 0.7% decline in the U.S. dollar index and growing concerns regarding Trump's trade policies. Analysts were optimistic, predicting that gold could reach $3,000 per ounce by mid-year due to ongoing market volatility and uncertainty surrounding economic policies. [a145dd37]
On January 17, gold and silver prices experienced a decline due to profit-taking by futures traders after reaching four-week highs. February gold prices fell by $13.90 to $2,737.00 per ounce, while March silver dropped by $0.62 to $31.105 per ounce. This pullback followed a period of strong performance, with spot gold trading at $2,715.09 per ounce, reflecting a gain of about 1% for the week prior. [f1cfa612]
The fluctuations in gold prices have been influenced by various factors, including recent inflation data. On January 14, the U.S. producer price index (PPI) for December showed a rise of only 0.2%, lower than expected, which contributed to the dollar's weakness and bolstered gold's appeal as a safe-haven asset. [00ff4146]
Despite the recent decline, the market remains optimistic, particularly following comments from Federal Reserve Governor Christopher Waller, who indicated that there could be three or four rate cuts this year. This speculation has positively influenced gold trading, as investors anticipate a more favorable environment for precious metals. [00ff4146]
In the broader market context, Asian and European stock markets were mixed to higher, with the UK's FTSE 100 reaching an all-time high. China's economy showed a growth rate of 5% in 2024, supported by government stimulus measures. Additionally, Rio Tinto and Glencore have ended talks on a potential merger, which would have been the largest mining deal in history. [f1cfa612]
Looking ahead, February gold futures are facing resistance at $2,761.30 and support at $2,650.00, while March silver futures have resistance at $33.33 and support at $30.00. Analysts continue to monitor upcoming economic indicators, including the consumer price index (CPI) for December, which is expected to show a year-on-year increase of 2.9%. [f1cfa612]