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At 11:39 GMT, XAU/USD is trading $2912.70, up $14.21 or +0.49%.
Trump’s Tariff Moves Drive Gold Demand
Gold’s strength is being fueled by uncertainty surrounding President Donald Trump’s aggressive trade policies. Since returning to office, Trump has introduced new tariffs and hinted at further reciprocal measures against countries that impose duties on U.S. goods. This disruption to global trade is stoking economic concerns and sending investors into gold as a hedge against uncertainty.
According to analysts at Commerzbank, central bank demand continues to underpin gold, even in the absence of fresh buying data. Additionally, heightened risk-off sentiment is keeping gold well-supported, with traders factoring in the potential for more trade-related volatility in the months ahead.
Fed Rate Cut Speculation Adds to Bullion’s Strength
Investors are also eyeing the U.S. Federal Reserve’s upcoming January meeting minutes for insights into future monetary policy. Market expectations for a Fed rate cut in 2025 have strengthened, especially after last week’s weaker-than-expected U.S. retail sales data. Lower interest rates tend to boost gold’s appeal by reducing the opportunity cost of holding the non-yielding asset.
“Price gains are also supported by growing expectations that the Fed will cut rates in 2025,” said Ricardo Evangelista, senior analyst at ActivTrades. If rate-cut bets gain further traction, it could provide an additional tailwind for gold prices.
Goldman Sachs Raises Gold Price Target to $3,100
Goldman Sachs has lifted its year-end price target for gold to $3,100 per ounce, up from a previous forecast of $2,890. The bank cites “structurally higher” central bank demand and increased speculative positioning as key drivers.
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