Today’s market analysis on behalf of Ahmad Assiri Research Strategist at Pepperstone
20th January 2025
Gold prices have gained 3% YTD above the $2700 mark, reflecting an environment increasingly influenced by heightened political and trade uncertainties. With Donald Trump inaugurated as the 47th U.S. president today, market focus has turned to his potential tariff strategies, including the much-debated universal tariff of 10–20%. If enacted, such policies could disrupt current global trade flows and amplify economic volatility, reinforcing gold’s role as a safe asset. Anticipation of a rapid-fire rollout of executive orders further adds to market jitters, as investors brace for immediate policy shifts with economic implications.
Recent U.S. inflationary pressure highlights gold’s strategic appeal. The economic data reflects a complex inflationary backdrop, with potential tariffs under Trump’s administration adding to the mix. Historically, gold has served as a reliable hedge against both inflation and political uncertainty. A friendly call between Trump and Chinese President Xi over the weekend temporarily eased risk premiums in Asian markets, but the looming potential for a trade war underscores gold’s enduring safe-haven demand, particularly in emerging markets.
The risk for gold seems to be skewed to the upside. Political tensions and trade uncertainties create fertile ground for volatility. Investors will closely monitor Trump’s early executive actions, which are expected to set the tone for broader market dynamics and gold’s trajectory in the weeks ahead.