Gold futures extended their recent rally on Wednesday, trading less than 1% below their record high, sparked by a soft dollar and the conviction that President Trump's policy plans will trigger trade wars and elevate market volatility.
The dollar index slid to its lowest in more than three weeks early in the session, making dollar-priced bullion less expensive for holders of other currencies.
Trump said he likely would impose a 10% tariff on goods imported from China starting February 1, the same day that he previously said Mexico and Canada could face levies of ~25%.
"Gold is... attracting safe haven flows in the wake of President Trump's tax cut/tariff plans, which run the risk of re-igniting inflation," Mizuho's Robert Yawger said.
Front-month Comex gold (XAUUSD:CUR) for January closed +0.4% to $2767.60/oz, the third-highest close in history and highest settlement value since October 30 - when it hit a record high of $2,788.50/oz - but front-month January silver (XAGUSD:CUR) ended -0.2% to $31.239/oz.
ETFs: (NYSEARCA:GLD), (NYSEARCA:GDX), (GDXJ), (IAU), (NUGT), (PHYS), (GLDM), (AAAU), (SGOL), (RING), (BAR), (OUNZ), (SLV), (PSLV), (SIVR), (SIL), (SILJ)
"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," said Ryan McIntyre, senior portfolio manager at Sprott Asset Management.
