Gold soared to its highest intraday level in nearly three months on Wednesday, as the lack of clarity around US President Donald Trump’s policy plans sparked fears of market volatility, boosting the appeal of safe havens.

By 11:05 a.m. ET, spot gold had risen 0.6% to $2,759.51 an ounce, about $30 shy of the record high set last year. US gold futures were 0.4% higher at $2,771.20 per ounce in New York.

Meanwhile, the US dollar dipped to a three-week low, making bullion less expensive for buyers.

Earlier in the session, the precious metal traded as high as $2,762 an ounce, having already risen 1.4% the previous session following Trump’s remarks on potential tariffs on its global trading partners.

Earlier in the week, the US President said his administration could impose a 25% import duty on Canada and Mexico as soon as Feb. 1. The threat of tariffs has since been extended to China and the European Union.

However, Trump — now in his second term — has yet to provide many details about his proposed tariffs, making investors question the aggressiveness of the move, and the depth of its potential impacts.

“There are uncertainties with proposed tariffs and other things, and gold typically does well when there’s a large or even a moderate amount of uncertainty in the market, it’s a natural place where people gravitate to,” Ryan McIntyre, senior portfolio manager at Sprott Asset Management, noted.

Investors are focused on the implications of the Trump administration’s tariff and tax cut policies, which would likely erode the nation’s finances and reignite inflation. That may in turn limit the Federal Reserve’s ability to keep easing monetary policy.

“(Trump) has been perhaps just a shade less hawkish on tariffs as feared which helps – less/lower tariffs is taken to indicate lower inflation hence potential for more rate cuts,” said Tai Wong, an independent metals trader.

(With files from Bloomberg and Reuters)

Source: MINING.COM – Read More