Gold prices near all-time high due to a weaker dollar and Trump uncertainty

Reuters reported on Friday (Jan 24) that global gold prices surged over 1%, nearing October's all-time high. This was attributed to a weaker dollar, spurred by US President Donald Trump's push for the Federal Reserve to cut interest rates and uncertainty surrounding tariff measures.

Gold prices have risen for four consecutive weeks.

Spot gold increased 0.7% to $2,772.79 per ounce as of 1:42 PM Eastern Time (18:42 GMT), up 2.7% for the week, just $17.3 shy of the all-time high of $2,790.15 recorded on October 31.

Meanwhile, US gold futures climbed 0.5% to $2,778.90 per ounce."A key factor is the weakening US dollar. One of the main drivers pushing gold prices higher is related to (President Trump) wanting to raise tariffs," said Bart Melek, Head of Commodity Strategy at TD Securities.

"(Trump) poses a risk of further gold price hikes, and I think the gold market is factoring in the potential for higher inflation and a more accommodative central bank," Melek added.

In uncertain times like these, gold, with its zero-yield return, remains a reliable hedge against inflation and uncertainty. It is particularly appealing in a low-interest-rate environment.At the World Economic Forum on Thursday, President Donald Trump called for an immediate interest rate cut, causing the dollar index (DXY) to hit its lowest level in over a month. This made gold more affordable for international buyers.

"Attention has now shifted to February 1 regarding tariff or trade policy announcements, with less focus on the January 29 Fed meeting," analysts from Standard Chartered noted in a report.

Trump stated that tariffs on goods from Mexico, Canada, China, and the European Union might be announced on February 1.

A surge in short-covering contributed to higher spot gold prices, but fund flows into ETFs remain volatile ahead of the Fed meeting. Traders expect the Fed to hold rates steady next week.

Spot silver rose 0.8% to $30.67 per ounce.

Platinum increased 0.6% to $948.

Palladium edged up 0.1% to $992.75, its highest level since November 25.

(2025/01/25-00:00)