Recent gold futures have seen their largest decline in four years, but analysts say Trump's tariff threats may boost the outlook for gold prices
Recent gold futures closed flat in New York, marking the largest decline in four years. Analysts point out that Trump's threat to impose tariffs on Canada and Mexico could enhance the outlook for gold prices. Although a stronger dollar and rising U.S. Treasury yields put pressure on precious metals, the increase in global public debt may support gold prices. Easing tensions in the Middle East could reduce some risk premiums, but the impact of the Russia-Ukraine war remains concerning. Investors are focused on the possibility of interest rate cuts by the Federal Reserve, as rate cuts would enhance the appeal of gold
Zhitong Finance learned that gold futures prices closed flat in New York on Tuesday, following news that a ceasefire may be reached between Israel and Lebanon, while near-month gold futures experienced their largest decline in four years. The dollar strengthened after President-elect Trump threatened to impose a 25% import tariff on Canada and Mexico, stabilizing gold after an earlier drop that day.
Analysts stated that since Trump's election, precious metals have faced pressure due to a stronger dollar and rising U.S. Treasury yields, but the ongoing increase in global public debt should support prices. With Israel and Hezbollah seemingly nearing a ceasefire agreement, tensions in the Middle East have eased, which may alleviate some risk premiums for precious metals, although concerns about the broader impact of the Russia-Ukraine war remain high.
The near-month gold futures contract for November delivery on the New York Mercantile Exchange rose 0.1% to $2,620.30 per ounce, marking the sixth increase in the past seven trading days, while the near-month silver futures contract for November rose 0.6% to $30.388 per ounce.
FlowCommunity analyst Ruben Ferreira wrote that the tariffs proposed by Trump could exacerbate market uncertainty and drive demand for safe-haven assets like gold to hedge against market risks and economic instability. Investors are also paying attention to the minutes from the Federal Reserve's November meeting, with mixed views on the possibility of a rate cut in December; Ferreira noted that a rate cut would further enhance the appeal of non-yielding gold