The gold price increased by 0.4%, continuing the recent rally, and approaching the record peak of $2,790.15 hit on October 30. The rise in prices was driven by increased demand for safe-haven assets due to ongoing uncertainty surrounding Donald Trump's trade policies.
Trump vowed to hit the European Union with tariffs and said his administration was discussing a 10% tariff on goods imported from China starting Feb. 1. Experts have warned that if Trump's policy increases inflationary pressures, it will force the Fed to keep interest rates at a higher level for a longer time, which will negatively affect gold. The next Fed meeting will be held next week, and 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).
The recent weakening of the US currency has also given momentum to the precious metal. 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) is trading at 107.97, up 0.02%. Since the beginning of this week, it has fallen by 1.3%. A weaker dollar makes gold more attractive for holders of other currencies.