Gold rallies as US dollar index declines

Gold bars

Gold prices rebounded today, Jan. 7, thanks to the US dollar’s downturn as markets assessed the prospects of US trade policies under the forthcoming Trump administration.

February gold futures inched up by 0.17%, or $4.90, to $2,652.30 per ounce at 12:18 pm Makkah time, with spot prices also climbing 0.31% to $2,643.51 an ounce.

Likewise, March silver futures soared 0.68% to $30.79 per ounce, in tandem with a 1% jump in platinum spot prices to $946.86 an ounce.

This came as the US dollar index, which gauges the greenback's strength against a basket of six currencies, shed 0.30% to 107.94 points, supporting the cheaper cost of buying the yellow metal with other currencies.

The US dollar's pullback was fueled by the uncertainty over the trade policies of incoming US President Donald Trump, who has repeatedly threatened to impose comprehensive tariffs on imports, targeting China, Canada, Europe and Mexico with additional tariffs.

The Washington Post reported yesterday, citing informed sources, that Trump aides were looking at a narrower approach to tariffs.

The sources claimed that Trump aides are exploring tariff plans that would only cover imports from certain sectors deemed critical to national or economic security, in what would have been a pivot from promises Trump made during the 2024 presidential campaign.

However, Trump denied this newspaper report in a post on the Truth Social platform. “It is just another example of Fake News,” he wrote.