Investing.com – Gold prices rose in Asian trading on Tuesday, with the dollar falling sharply overnight, as traders tried to evaluate US President Donald Trump's policies after his inauguration.
The price of gold rose 0.3% to $2,727.39 per ounce, while the price of contracts expiring in February rose 0.4% to $2,743.57 per ounce by 01:28 ET (06:28 GMT).
Gold rises as 'safe haven' shines amid uncertainty
Gold traders are bracing for increased volatility as Trump begins his second term, with his expected political announcements expected to impact market dynamics.
The precious metal, traditionally seen as a safe-haven asset, held its price above a one-month high.
Market sentiment is currently shaped by the interaction between potential shifts in US policy and the Federal Reserve's monetary stance.
Trump pledged to impose new trade tariffs on his neighboring countries and on China to reduce its trade deficit. This could provide renewed strength to the dollar, and thus impact gold prices.
The index fell more than 1% overnight but later rebounded during trading hours in Asia, rising 0.3%.
A weak dollar usually sends gold prices higher because it makes the metal cheaper for buyers using other currencies.
Traders are closely monitoring Trump's moves to assess their impact on gold's trajectory.
Other precious metal prices were mixed on Tuesday. Gold fell 0.4% to $958.80 per ounce, while it rose 0.6% to $31.30 per ounce.
Copper remains under pressure as concerns grow over tariffs
Among industrial metals, copper prices were lower due to a combination of expected US tariffs, the possibility of a higher dollar, and investor caution after Trump's inauguration, which affected the red metal.
During periods of escalating tariffs and trade tensions, such as in mid-2018 and mid-2019, copper prices fell sharply as investors expected lower demand from China, the world's largest copper consumer.
The London Metal Exchange benchmark was largely weak at $9,255.50 a tonne, while February fell 0.6% to $4.2910 a pound.
