Gold Prices Near All-Time High Amid Dollar Weakness, Trump Talks Tariffs and Rates
Friday, 1/24/2025 15:54
GOLD PRICES surged on Friday, just $12 per ounce below their all-time high as the US dollar fell to a one-month low, following comments by US President Donald Trump suggesting a potentially softer stance on tariffs against China and demanding lower interest rates,
writes Atsuko Whitehouse at BullionVault. While gold in US dollars remained slightly below its record, the precious metal hit all-time highs in major currencies, including the Euro, Sterling, Japanese Yen and Chinese Yuan.
Spot gold rose as much as 1.2%, reaching its highest level since Halloween’s pre-election peak of $2790 per ounce this Friday lunchtime, after recovering from a $10 drop in the previous session. The yellow metal is on track for its best week
since November 2024, when prices rose due to concerns over Russia’s 1000-day war on Ukraine could spread into a global conflict.
Gold priced in Euros hit a record high of €2658, while UK gold prices reached £2241 per ounce. In Japan, gold rose to ¥13940 per gram, similarly, on the Shanghai Gold Exchange, gold reached ¥646 per gram at Shanghai’s afternoon benchmarking auction.
"With oil prices going down, I'll
demand that interest rates drop immediately, and likewise they should be dropping all over the world," Trump said at the World Economic Forum on Thursday in Davos, Switzerland.
Trump continued warning global business and political leaders via video link that they would face tariffs if they manufactured their products outside the US. However, during a subsequent interview with Fox News later that day, he said he would
prefer not to impose tariffs on China.
The Dollar Index—a measure of the US currency's value relative to major peers—fell 0.5% to its weakest level since 17 December on Friday, marking a weekly decline of over 1%, the steepest in two months. The Greenback, however, remained near its highest level in two years, which was reached in December after the US central bank
halved its forecast for the scale of future rate cuts in its 'dot plot' projections at its policy meeting.
“We expect investors to be willing to look through dollar strength,” Joni Teves, a strategist for Swiss bank and bullion clearer UBS
wrote in a note, adding that gold would attract demand as a safe haven and diversifier in a period of volatility and macroeconomic uncertainty.
Market consensus now anticipates that Fed rates will drop to 3.94% by the end of 2025, 5 basis points lower than in the previous session. This marks the lowest level since the last Federal Reserve policy meeting in December.
Earlier this week, Trump declared a 25% tariff on products imported from Canada and Mexico, set to take effect on 1 February 2025, unless these countries take measures to reduce the influx of migrants and fentanyl. The president later extended the 1 February deadline to China on Tuesday, threatening a 10% tariff.
Gold has gained as much as 2.6% since President Trump returned to the White House on Monday, while the precious metal in
UK Pounds and Euro climbed 1.9% and 2.3% during the same timeframe, respectively.
Gold prices in the Japanese yen surged 2.9% over the past four days, amid the Bank of Japan's decision on Friday to raise short-term interest rates by 0.25%, bringing them to their highest level since the 2008 global financial crisis.
Gold prices on the Shanghai Gold Exchange climbed 1.4% since Monday, shifting from a premium of $11.8 per ounce last week to a discount of $0.8 per ounce this week, indicating weaker demand in the metal’s largest consumer market.
Oil prices edged up on Friday but remained on track for a weekly decline after President Trump demanded that OPEC reduce crude prices. Over the course of the week, Brent crude has decreased by nearly 3%, while West Texas Intermediate (WTI) has seen a decline of 4%.
In contrast, palladium—used primarily in auto-catalysts to reduce carbon emissions from gasoline engines—surged above $1000 per ounce on Friday for the first time since 25 November 2024, gaining as much as 7.9% since Trump returned to office. This rally coincided with Trump threatening new sanctions and tariffs on Russia if no agreement is reached on Ukraine. As the country that mines the most palladium, Russia’s position significantly impacts global markets. Analysts also observed a potential resurgence of internal combustion engines in light of Trump's declaration of a national energy emergency on Monday, which included rolling back environmental restrictions and withdrawing from an international climate pact.
Silver prices, which derive nearly 60% of their annual demand from industrial uses, rose 1.4% on Friday and 2.3% over the last four sessions.
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