Gold climbed above $2,720 per ounce on Tuesday, continuing its gains from the previous session as investors remained focused on the potential effects of U.S. President Donald Trump's policies during his second term.
Gold extends gains after Trump's inauguration
Trump mentioned the possibility of imposing 25% tariffs on Mexico and Canada starting early next month, though he did not specify a timeline for tariffs on China. If these tariffs are implemented, they could lead to a trade war, driving up demand for safe-haven assets like gold. At the same time, investors are considering inflation risks, as Trump’s agenda of tax cuts and increased government spending could exacerbate price pressures, potentially limiting the Federal Reserve's ability to ease monetary policy and reducing gold's appeal.
Focus on Gaza
On the geopolitical front, traders are closely monitoring the outcomes of a long-delayed ceasefire agreement between Israel and Hamas.
