Gold prices jump to their highest levels since October amid dollar weakness
Gold prices rise for the fourth week
Gold prices rose for the fourth week in a row, as gold in spot transactions increased 0.7% to $2,772.79 per ounce, rising 2.7% within a week, which is only $17.3 less than its highest level ever at $2,790.15 recorded on October 31.
Meanwhile, US gold futures rose 0.5% to $2,778.90 an ounce.
Worst performance of the dollar
The US dollar recorded its worst weekly performance in more than a year, losing 1.77%, with the dollar index falling to 107.465 points, down from its highest level of 110.17 earlier this month.
Read also: Why are gold prices fluctuating so much now…and what are the expectations for the precious metal?
Market sentiment turned bearish following Trump’s comments suggesting that upcoming tariffs may be smaller and less widespread than initially feared.
This has eased concerns about a global trade war and shifted focus to potential inflationary pressures, supporting gold as a hedge against rising prices.
The reason for the rise in gold prices
Regarding this, Bart Melek, commodity strategist at TD Securities, said: “The main factor is the weakness of the US dollar, as it is one of the main factors pushing gold prices to rise, related to (President Trump’s) desire to raise customs duties.”
Melik added, “Trump poses a risk that gold prices will rise again, and I believe that the gold market is taking into account the possibility of higher inflation and more lenient steps from the Federal Reserve.”
Using gold as a safe haven
In times of uncertainty like these, gold, with its near-zero yields, remains a reliable hedge against inflation and uncertainty and is particularly attractive in a low interest rate environment.
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At the World Economic Forum, US President Donald Trump called for an immediate reduction in interest rates, causing the dollar index (Dixie) to fall to its lowest levels in more than a month, and this made gold more expensive for international buyers.
Impact of tariffs
“Attention has now shifted to February 1 in terms of tariff or trade policy announcements, with less focus on the January 29 Fed meeting,” Standard Chartered analysts said in a report.
Trump said tariffs on goods from Mexico, Canada, China and the European Union could be announced on February 1.
Performance of other metals
Silver rose in spot transactions 0.8% to $30.67 per ounce, while platinum rose 0.6% to $948, and palladium rose 0.1% to $992.75 per ounce, its highest level since November 25.
Gold price forecast
Gold’s bullish momentum suggests that a retest of its high at $2,790.17 could be imminent in the face of continued weakness in the dollar, coupled with uncertainty surrounding tariffs and trade policy, providing a favorable backdrop for further upside.
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