U.S. gold futures fell 0.5% after hitting their highest level since October 31 yesterday. The price pullback was caused by partial profit-taking, rising yields on U.S. Treasury bonds, and the lack of specific statements from Donald Trump about tariffs.
The further fall in gold prices was limited by the negative dynamics of the US currency. The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) fell by 0.07% to 108.20. Yesterday, the index reached its lowest level since December 19.
Meanwhile, experts have warned that the price of gold could jump to the psychological mark of $3,000 per ounce if Trump's policy boosts demand for inflation hedges and safe havens. Earlier this week, Trump said he was discussing the imposition of duties of about 25% for Canada and Mexico and 10% for China from February 1. He also promised duties on European imports, but did not provide any details. Due to Trump's upcoming policies on tariffs and immigration, Fed policymakers at their January meeting may confirm a longer path to achieving the 2% inflation target. According to the CME FedWatch Tool, markets see a 0.5% probability of a 0.25% rate cut in January (compared to 2.1% a week ago). Gold is considered a safe investment amid economic and geopolitical turmoil, but higher interest rates reduce bullion's appeal as it yields no interest.