Gold prices edged higher on Tuesday, driven by uncertainty over U.S. President-elect Donald Trump’s policy plans and investor positioning ahead of key U.S. inflation data.
Key Developments:
- Spot gold climbed 0.5% to $2,674.26 per ounce as of 0502 GMT, while U.S. gold futures rose 0.4% to $2,689.10.
- Monday’s 1% decline in gold followed robust U.S. jobs data that bolstered the dollar and reinforced the Federal Reserve’s cautious stance on rate cuts for 2025.
- Analysts highlight concerns that Trump’s tariff policies may spur inflation, enhancing gold’s role as an inflation hedge.
Market Insights:
“Gold’s resilience during periods of dollar strength underscores its appeal as a hedge against inflation,” noted Tim Waterer, Chief Market Analyst at KCM Trade.
Investors are closely monitoring the U.S. producer price index (PPI) report due at 1330 GMT and Wednesday’s consumer price index (CPI) data, which will provide further clarity on the Federal Reserve’s policy direction.
Investor Positioning:
- COMEX gold speculators increased net long positions by 12,116 contracts to 194,499 as of Jan. 7, signaling sustained bullish sentiment.
Other Precious Metals:
- Spot silver rose 0.3% to $29.68 per ounce.
- Palladium gained 0.6% to $959.70.
- Platinum increased 0.5% to $943.25.
Analysts suggest softer inflation data this week could weaken the dollar, potentially boosting gold as a more affordable asset.
