By Anjana Anil and Sherin Elizabeth Varghese
(Reuters) – Gold prices firmed on Thursday as the dollar softened following U.S. President Donald Trump’s call for lower interest rates, with market attention remaining focused on the broader implications of his policies.
Spot gold rose 0.1% to $2,753.19 per ounce by 03:28 p.m. ET (2028 GMT). Prices hit a more than three-month peak on Wednesday, $26.72 shy of their all-time high of $2,790.15 in October.
U.S. gold futures settled 0.2% lower at $2,765.
The dollar index was down 0.2%, making greenback-priced gold less expensive. [USD/]
“Some of it was the dollar, it was higher this morning and then sold off, so that pushed gold off its lows,” said Daniel Pavilonis, senior market strategist at RJO Futures.
“Today’s moves are just cognizant of the direction coming out of the White House. I think part of the volatility was in anticipation of that.”
Speaking at the World Economic Forum, Donald Trump emphasized his commitment to reversing inflation, announcing plans to push for an immediate drop in interest rates. He also urged other nations to adopt similar measures to address global economic challenges.
Non-yielding bullion thrives in a low interest rate environment.
However, traders see a 99.5% chance of the U.S. Federal Reserve keeping rates unchanged at its Jan. 28-29 meeting, according to the CME Group’s FedWatch Tool.
Uncertainty about Trump’s trade plans prevailed as he said tariffs on imports from Canada, Mexico, China and the European Union could be announced on Feb. 1.
Lack of clarity about future policies has led to market participants flocking to safe-haven assets such as gold to hedge against volatility.
“There’s just so much uncertainty now, and I can imagine gold would probably pause for a little while with several other markets, to just kind of get some definition out of what is actually going to be implemented,” Pavilonis added.
Spot silver dropped 1.1% to $30.45 per ounce, while platinum shed 0.2% to $943.84.
Trump had also threatened Russia “and other participating countries” with taxes, tariffs and sanctions if a deal to end the war in Ukraine is not struck soon.
Russia is the world’s largest palladium producer and a major supplier of the metal to the United States.
Palladium added 1.3% to $990.31.
(Reporting by Anjana Anil and Sherin Elizabeth Varghese in Bengaluru; Editing by Shounak Dasgupta, Mohammed Safi Shamsi and Chizu Nomiyama)
