Lagos — Just $40 shy of its all-time high, gold is trading at $2,750 showing a strong upward momentum driven by renewed concerns over tariffs, which have become an expected negotiation tool – akin to a wildcard in trade relations.
The current level marks the highest since November 6, the day Donald Trump was declared the winner of the U.S. presidential election. This development underscores that gold’s recent rally is not random but rooted in forward-looking expectations of escalating trade risks tied to tariffs. These dynamics appear to be solidifying as the new market norm.
Gold’s rise coincides with a decline in the U.S. Dollar Index, which has fallen to 108 against a basket of major currencies. A weaker dollar partially explains the bullish momentum in gold, which has reached its highest level in 11 weeks. The increased demand for the precious metal reflects investors’ desire to hedge against risks, paving the way for gold to test its historic peak of $2,789 should the current bullish trend persist.
The continuation of this momentum is closely tied to developments in global trade and the uncertainty stemming from the U.S. The new US administration has yet to discuss critical issues, amplifying market sensitivity to news in the short term as such gold is expected to remain influenced by economic shifts, particularly tariff talks. As new policy intentions emerge, fresh signals could potentially drive gold toward new records.
*Ahmad Assiri Research Strategist at Pepperstone
