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Gold Extends Gains into New Year as Traders Brace for Trump Policies

Ingots of 99.99 percent pure gold are placed in a workroom at the Novosibirsk precious metals refining and manufacturing plant in the Siberian city of Novosibirsk, Russia, September 15, 2023. REUTERS/Alexander Manzyuk/FILE PHOTO
Ingots of 99.99 percent pure gold are placed in a workroom at the Novosibirsk precious metals refining and manufacturing plant in the Siberian city of Novosibirsk, Russia, September 15, 2023. REUTERS/Alexander Manzyuk/FILE PHOTO
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Gold Extends Gains into New Year as Traders Brace for Trump Policies

Ingots of 99.99 percent pure gold are placed in a workroom at the Novosibirsk precious metals refining and manufacturing plant in the Siberian city of Novosibirsk, Russia, September 15, 2023. REUTERS/Alexander Manzyuk/FILE PHOTO
Ingots of 99.99 percent pure gold are placed in a workroom at the Novosibirsk precious metals refining and manufacturing plant in the Siberian city of Novosibirsk, Russia, September 15, 2023. REUTERS/Alexander Manzyuk/FILE PHOTO

Gold prices rose on Thursday, keeping up the momentum from a positive end to record-breaking 2024, as traders braced for US President-elect Donald Trump's expected policy shifts that will shape the economic and interest rate outlook for the new year.
Bullion surged over 27% last year, its biggest annual gain since 2010, as the US Federal Reserve's substantial rate cuts, robust central bank purchases and escalating geopolitical tensions boosted it to multiple record highs last year.
On the first trading session of the year, spot gold rose 0.4% to $2,634.88 per ounce, as of 0553 GMT. US gold futures edged up 0.2% to $2,646.70, Reuters said.
"Gold seems to be consolidating in a tight range, which often signals a market that's poised for a breakout. I suspect that breakout will be to the upside," said Kyle Rodda, financial market analyst at Capital.com.
Gold is likely to remain bullish in 2025, driven by geopolitical risks and expectations of rising government debt due to a deep fiscal deficit under Trump’s administration, despite potential challenges from slower Fed rate cuts and dollar strength, Rodda said.
The market will now take cues from a slew of US economic data due next week, which could influence the interest rate outlook for 2025, and Trump's tariff policies.
Donald Trump will be sworn in as president of the United States on Jan. 20.
Traders anticipate the Fed to adopt a slow and cautious approach to further rate cuts in 2025, as inflation continues to exceed its 2% target. According to the CME's FedWatch Tool, markets are pricing in just 11.2% chance of a cut in January.
Gold, which is seen as a safe investment in times of geopolitical and economic uncertainty, tends to be negatively impacted by high interest rates.
Spot silver rose 1.6% to $29.34 per ounce, palladium added 1.1% to $913.47 and platinum gained 0.9% to $918.65.
Silver ended 2024 as its best year since 2020, while platinum and palladium declined.

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Trump Warns No Country 'Off the Hook' on Tariffs

12 April 2025, US, Miami: President of the United States of America Donald J. Trump greets fans at UFC 314 at the Kaseya Center in Miami, Florida. Photo: Alejandro Salazar/ZUMA Press Wire/dpa
12 April 2025, US, Miami: President of the United States of America Donald J. Trump greets fans at UFC 314 at the Kaseya Center in Miami, Florida. Photo: Alejandro Salazar/ZUMA Press Wire/dpa
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Trump Warns No Country 'Off the Hook' on Tariffs

12 April 2025, US, Miami: President of the United States of America Donald J. Trump greets fans at UFC 314 at the Kaseya Center in Miami, Florida. Photo: Alejandro Salazar/ZUMA Press Wire/dpa
12 April 2025, US, Miami: President of the United States of America Donald J. Trump greets fans at UFC 314 at the Kaseya Center in Miami, Florida. Photo: Alejandro Salazar/ZUMA Press Wire/dpa

US President Donald Trump warned Sunday that no country would be "getting off the hook" on tariffs, as his administration suggested exemptions seen as favoring China would be short-lived.

The world's two largest economies have been locked in a fast-moving, high-stakes game of brinkmanship since Trump launched a global tariff assault that particularly targeted Chinese imports, AFP said.

Tit-for-tat exchanges have seen US levies imposed on China rise to 145 percent, and Beijing setting a retaliatory 125 percent band on US imports.

The US side had appeared to dial down the pressure slightly on Friday, listing tariff exemptions for smartphones, laptops, semiconductors and other electronic products for which China is a major source.

Trump and some of his top aides said Sunday that the exemptions had been misconstrued and would only be temporary as his team pursued fresh tariffs against many items on the list.

"NOBODY is getting 'off the hook'... especially not China which, by far, treats us the worst!" he posted on his Truth Social platform.

Earlier, Beijing's Commerce Ministry had said Friday's move only "represents a small step" and insisted that the Trump administration should "completely cancel" the whole tariff strategy.

Chinese President Xi Jinping warned Monday -- as he kicked off a tour of Southeast Asia with a visit to manufacturing powerhouse Vietnam -- that protectionism "will lead nowhere".

Writing in an article published in a Vietnamese newspaper, Xi urged the two countries to "resolutely safeguard the multilateral trading system, stable global industrial and supply chains, and open and cooperative international environment."

He also reiterated Beijing's line that a "trade war and tariff war will produce no winner."

Asian stock markets rose Monday after Trump's announcement of the tariff exemptions.

Short-lived relief?

Washington's new exemptions will benefit US tech companies such as Nvidia and Dell as well as Apple, which makes iPhones and other premium products in China.

The relief could, however, be short-lived with some of the exempted consumer electronics targeted for upcoming sector-specific tariffs on goods deemed key to US national defense networks.

On Air Force One Sunday, Trump said tariffs on the semiconductors -- which powers any major technology from e-vehicles and iPhones to missile systems -- "will be in place in the not distant future."

"Like we did with steel, like we did with automobiles, like we did with aluminum... we'll be doing that with semiconductors, with chips and numerous other things," he said.

"We want to make our chips and semiconductors and other things in our country," Trump reiterated, adding that he would do the same with "drugs and pharmaceuticals.

The US president said he would announce tariffs rates for semiconductors "over the next week," while his commerce secretary, Howard Lutnick, said they would likely be in place "in a month or two.

The US president sent financial markets into a tailspin earlier this month by announcing sweeping import taxes on dozens of trade partners, only to abruptly announce a 90-day pause for most of them.

China was excluded from the reprieve.

The White House says Trump remains optimistic about securing a deal with China, although administration officials have made it clear they expect Beijing to reach out first.

Trump's trade representative Jamieson Greer told CBS "Face the Nation" on Sunday that "we don't have any plans" for talks between the US president and his Chinese counterpart Xi.

China looks elsewhere

China has sought to present itself as a stable alternative to an erratic Washington, courting countries spooked by the global economic storm.

Besides Vietnam, Xi will also visit Malaysia and Cambodia, seeking to tighten regional trade ties and with plans to meet his three Southeast Asian counterparts.

The fallout from Trump's tariffs -- and subsequent whiplash policy reversals -- has sent particular shockwaves through the US economy, with investors dumping government bonds, the dollar tumbling and consumer confidence plunging.

Adding to the pressure on Trump, Wall Street billionaires -- including a number of his own supporters -- have openly criticized the tariff strategy as damaging and counterproductive.

The White House insists the aggressive policy is bearing fruit, saying dozens of countries have already opened trade negotiations to secure a deal before the 90-day pause ends.

"We're working around the clock, day and night, sharing paper, receiving offers and giving feedback to these countries," Greer told CBS.