Gold rises above $2,700 ahead of Trump inauguration

Gold traded above $2,700 per ounce on Monday, recovering from earlier losses as investors prepared for President-elect Donald Trump’s inauguration later in the day.

Gold rises above $2,700 ahead of Trump inauguration

His proposed trade tariffs are seen as likely to stoke inflation and possibly ignite trade wars, increasing gold’s appeal as a hedge against rising prices. Last week’s soft U.S. core inflation reading and weaker-than-expected producer price inflation and retail sales data revived speculation that the Federal Reserve may implement further rate cuts this year. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold, making it more attractive.

Middle East ceasefire eases safe-haven demand

However, easing tensions in the Middle East tempered demand for safe-haven assets. This followed Israel’s release of the first batch of 90 Palestinian prisoners on Sunday in exchange for three hostages freed from Gaza, marking the start of a ceasefire after 15 months of conflict.