Gold Price News: Gold Climbs to Three-Month High

Gold prices pushed higher on Tuesday, rising to a three-month high amid weakness in the US dollar.

Prices rose to a high of $2,746 an ounce on Tuesday, compared with around $2,710 an ounce in late deals on Monday. That was the highest price for gold since November 1^st, 2024.

The US dollar fell sharply against other major currencies on Monday and Tuesday. This tends to put upward pressure on dollar-denominated assets like gold, as it makes the precious metal cheaper for buyers in other currencies.

Potential US tariffs seen as inflationary

The gold markets were also weighing potentially bearish elements for prices.

The inauguration of US President Donald Trump on Monday has focused minds on the possibility of trade tariffs materialising, which are seen as inflationary, potentially limiting the US Fed’s leeway to cut interest rates further. Trump has already threatened 25% tariffs within days for Mexico and Canada, prompting Canadian Prime Minister Justin Trudeau on Tuesday to warn that Canada will respond if the US goes ahead with tariffs.

Market positioning

Meanwhile, gold-backed ETFs saw net inflows of 19 tonnes in the week to January 17^th, of which 15.9 tonnes were from Europe, according to World Gold Council figures updated January 20^th: Gold ETF: Stock, Holdings and Flows.  The latest figure compares with net inflows of 5.9 tonnes in the week to January 10^th and net outflows of 3.2 tonnes in the week to January 3^rd.

Separately, open interest in gold futures contracts on exchanges rose to $189.8 billion in the week to January 17^th, rising for the third straight week. The figure compares with $172.5 billion in the week to January 10^th. The level of open interest is now close to its 2024 peak of $194.4 billion seen in the week to October 25^th, 2024.

Upcoming data/events

Looking ahead, Wednesday will bring a planned speech by ECB President Christine Lagarde, which may provide an update on the status of the EU economy and help chart the path forward for interest rates by the central bank. Then on Thursday, attention will turn to the US weekly initial jobless claims figures for the latest snapshot on the US labour market.