Gold jumps to 11-week peak amid Trump policy uncertainty, soft dollar

Gold prices climbed to a fresh 11-week peak on Wednesday, boosted by safe haven demand amid uncertainty surrounding U.S. President Donald Trump's trade policies and a softer dollar.

Spot gold added 0.1% to $2,748.18 per ounce as of 0236 GMT, after hitting its highest since Nov. 5, 2024 earlier in the session. U.S. gold futures gained 0.1% to $2,762.90.

"There is still some uncertainty regarding when Trump wants to implement his policies on major trading partners of the U.S., causing a lot of uncertainty in direction of dollar, which is the primary short-term catalyst driving bullish tone in gold price," said Kelvin Wong, OANDA's senior market analyst for Asia Pacific.

Trump held back from imposing trade barriers on his first day in office on Monday, pushing the dollar lower.

A weaker dollar makes gold more attractive for foreign buyers. Gold is considered a safe investment during economic and geopolitical uncertainty.

Trump vowed to hit the European Union with tariffs and said his administration was discussing a 10% tariff on goods imported from China starting Feb. 1.

Gold's appeal as an inflation hedge may be diminished if Trump's policies, which are seen as inflationary, lead the Federal Reserve to maintain interest rates higher for longer.

After two years of progress on inflation and surprisingly persistent economic growth, the Fed meets next week with one eye on the new Trump administration's policies and another on the bond market that has ratcheted up borrowing costs even as U.S. central bankers have been cutting rates.

The Fed is expected to hold its benchmark rate steady in the current 4.25%-4.50% range at its Jan. 28-29 policy meeting, after reducing it by a full percentage point since September 2024.

Higher interest rates dampen non-yielding gold's appeal.

Spot silver fell 0.4% to $30.74 per ounce and palladium shed 0.2% to $955.11. Platinum steadied at 943.10.