Gold prices rebounded strongly during Tuesday’s trading session (January 28), following a sell-off in tech stocks the previous day. The mounting uncertainty surrounding President Donald Trump’s tariff plans continued to drive demand for gold as a safe-haven asset.
At the close of trading in New York, spot gold prices rose by $22.50/oz compared to the previous session’s close, equivalent to a 0.82% increase, ending at $2,764/oz, according to data from the Kitco exchange.
As of 8 a.m. on Wednesday (January 29), spot gold prices were up by $0.20/oz compared to the US close, trading at $2,764.20/oz. Converted at Vietcombank’s selling rate, this price is equivalent to nearly VND 84.3 million/troy ounce, an increase of VND 800,000/troy ounce compared to the previous day’s morning session.
On Monday, gold prices worldwide fell by more than 1% as tech stocks suffered a sell-off due to investor concerns about the emergence of a cheap artificial intelligence (AI) model from China.
In a statement released on Tuesday, the White House said that Trump still intends to impose a 25% tariff on imports from Canada and Mexico this Saturday and is considering new tariffs on Chinese goods. The day before, Trump had stated that he planned to impose tariffs on computer chips, pharmaceuticals, and steel to encourage the production of these items in the US.
“I believe one of the biggest factors in gold’s price increase is the statements regarding tariffs,” said Daniel Pavilonis, a strategist at RJO Futures, to Reuters. “Additionally, gold is supported by geopolitical risks and expectations of rising inflation.”
Apart from its potential to cause inflation, Trump’s policies could also lead to trade wars, encouraging investors’ risk aversion.
The recovery in gold prices during this session was supported by falling US Treasury bond yields, while a stronger US dollar created downward pressure.
The yield on the 10-year US Treasury bond fell to 4.52% from the previous session’s 4.53%. The Dollar Index, which measures the strength of the US dollar against a basket of six major currencies, closed at 107.87, up from the previous session’s 107.34.
For the rest of the week, investors in the gold market will be focused on the Federal Reserve’s interest rate decision on Wednesday and Fed Chairman Jerome Powell’s press conference on the same day. The market is almost certain that the Fed will keep rates unchanged this time but is waiting to see if Powell will signal a rate cut later this year.
“Gold prices are not far from their all-time high. The upward momentum remains, and gold prices are just waiting for a catalyst to break out,” said Phillip Streible, chief strategist at Blue Line Futures.
In a Reuters survey, experts predicted that gold prices would reach new records this year due to increased economic uncertainty and the return of inflationary risks.
Recently, Trump stated that he wanted interest rates to come down, which has led some investors to worry about the Fed’s ability to maintain independence in its monetary policy decisions.
Ole Hansen, head of commodity strategy at Saxo Bank, argued that the prospect of conflict between Trump and the Fed is creating uncertainty, and in this environment, gold benefits as a safe-haven asset. Hansen added that with gold’s new upward momentum, the $2,800/oz level could be just the beginning.
“I don’t see any risk of gold prices rising too high as long as this uncertainty continues. The breakout in gold prices could attract new buying momentum,” Hansen told Kitco News.
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