Trump effect: Gold prices zoom to two-month high
- Gold prices hit a high of $1,217.26 per ounce.
- The high price reflects investor uncertainty about the policies of President Trump.
- Gold demand has also slowed in India as consumers await import duty cuts.
FollowReflecting global market uncertainty about the economic policies of new U.S. President Donald Trump, gold prices surged to a two-month high of $1,217.26 per ounce early on January 23. This is the highest since late November.
Investors consider gold prices as being linked to market sentiments of risk. Gold prices had risen from mid-December over concerns about whether Trump would pursue protectionist policies. Since he won the Presidential Elections in November, investors have veered from being wary of Trump’s protectionist claims to being optimistic about his proposals to stimulate economic growth in the U.S.
Experts said that since Trump focused on a pro-growth platform for the economy in his inaugural address on January 20, they don’t foresee a continued rally in gold prices. However, the rise in prices shows that investors are adopting a “wait and watch approach” to Trump’s policy plans, which means investors would want to buy gold. Gold demand has also slowed in India, one of the world’s largest importers of the precious metal, as consumers expect a cut in import duties.
Analysts expect the financial markets to be volatile in the next 100 days due to the lack of clarity on Trump’s policies. Another factor favouring gold prices is the expectation that the U.S. Federal Reserve is unlikely to raise interest rates soon.
