Investing.com – Gold prices were broadly lower on Thursday but held near three-month highs, as the U.S. dollar faced pressure after President Donald Trump avoided a swift introduction of tariffs at the start of his second term.
it was largely unchanged at $2,755.14, near its highest level since late October, while at February expiration it lost 0.3% to $2,763.39 an ounce by 01:35 ET (0635 GMT).
The yellow metal posted three straight days of gains this week as demand for the safe haven rose as traders tried to gauge Trump’s policies. His policies are expected to increase inflation, and gold is seen as a hedge against inflation.
A weak dollar supports gold prices
The dollar fell sharply on Monday and has remained relatively weak this week as Trump avoided details on the imposition of US trade tariffs, further supporting gold prices.
On Tuesday, Trump said he was considering imposing 10 percent tariffs on Chinese imports from February 1 and also vowed to hit the European Union with tariffs. This indicated that the tariffs are expected to come gradually.
The increased tariffs are likely to result in a narrowing of the trade imbalance and higher inflation in the US, both of which are positive for the dollar.
On Thursday, it was slightly weaker in the Asian trade.
A stronger dollar usually lowers gold prices because it makes the metal more expensive for buyers using other currencies.
The rise in bullion prices also reflects that markets are bracing for global uncertainty as Trump’s policy announcements and customs declarations are expected to cause increased volatility.
Other precious metals fell on Thursday. slipped 0.7% to $964.30 an ounce, while it fell 0.6% to $31.218 an ounce.
Copper extends decline on tariff fears
Copper prices fell on heightened concerns over a potential escalation of US tariffs, which could slow global economic growth and reduce demand for the industrial metal.
In addition, looming tariff threats fueled fears of weaker demand from China, the world’s largest consumer of copper. The tariffs could further weigh on China’s economy, which is already facing the challenges of slowing industrial production and tepid domestic growth.
The London Metal Exchange benchmark fell 0.8% to $91,673.50 a tonne, while February fell 0.9% to $4.2568 a pound.
