World gold prices turned down from a 3-week peak

Closing the January 3 session, the world spot gold price decreased by 17.8 USD to 2,639 USD. At the beginning of the session, the price also hit a 3-week peak at 2,664 USD.

The market went down mainly because the dollar strengthened and investors prepared for economic and trade changes under President-elect Donald Trump (USA). Nitesh Shah – commodity strategist at WisdomTree said that Mr. Trump’s proposal to impose import taxes will push the USD up and put great pressure on the precious metals market.

Dollar Index – measuring the strength of the greenback against a basket of major currencies – has just recorded its strongest weekly increase since mid-November. The stronger USD makes gold more expensive for buyers outside the US.

“Global trade flows and slowing economic activity will cause precious metals demand to decline,” Shah said, referring to the impact of Mr. Trump’s import tariffs.

However, precious metals still have many supporting factors. That is the increase in public debt in the US and many other countries. Geopolitical issues will also be difficult to end soon.

On January 20, Mr. Trump will be inaugurated as President of the United States. His protectionist policies are expected to fuel inflation, slow down the monetary easing process of the US Federal Reserve (Fed), thereby limiting the rise of gold prices. After three interest rate cuts in 2024, the Fed forecasts only two interest rate cuts this year.

However, in the first month of the year, gold prices often perform well. “For the past 20 years, January has often recorded strong price increases, due to investors opening new positions and high demand for holiday jewelry,” said Ross Norman – an independent precious metals analyst.

In contrast to gold, other precious metals increased in price on January 3. Silver rose 0.2% to $29.60. Platinum increased 1.9% to 940 USD and palladium increased 1.7% to close at 926 USD.