Gold Prices Surge Amid Trade Uncertainty and Geopolitical Tensions
Gold prices climbed to nearly three-month highs on Wednesday, January 22, reaching $2,763.42 per ounce during the session before closing at $2,756.10 per ounce. The rise comes despite a strengthening U.S. dollar, as strong safe-haven demand pushed gold prices decisively above the psychological $2,750 per ounce level.
Market analysts attribute the surge to growing investor anxiety over U.S. trade policies and escalating geopolitical tensions. FXStreet analyst Christian Borjon Valencia noted that gold’s rally indicates robust demand for safe-haven assets amid uncertainty surrounding U.S. President Donald Trump’s trade rhetoric. Trump’s announcement of proposed tariffs on goods imported from China, Mexico, and Canada has further fueled market volatility. He has suggested a 10% tariff on Chinese imports beginning February 1 and potential 25% tariffs on goods from Mexico and Canada.
In addition to trade concerns, geopolitical tensions have bolstered gold’s attractiveness. President Trump warned Russian President Vladimir Putin of tougher sanctions and tariffs if Russia fails to reach a peace agreement with Ukraine. Trump stated, “If we do not reach an agreement soon, I will have no choice but to impose high tariffs and sanctions on all products sold by Russia to the United States and many other countries.”
Meanwhile, Middle East tensions escalated as a ceasefire between Israel and Hamas stalled, with reports of Israeli drone attacks in southern Lebanon further unsettling markets.
Ryan McIntyre, senior portfolio manager at Sprott, highlighted the enduring role of gold during times of market turbulence: “When there is a lot of uncertainty in the market, or even just a moderate amount, gold usually performs well because it's a popularly favored safe-haven investment.”
Valencia suggested that gold could soon challenge its all-time high of $2,790 per ounce, achieved in October 2024. The next potential targets include $2,800, $2,850, and $2,900 per ounce if the rally continues. On the downside, support levels are identified at the 50-day and 100-day Simple Moving Averages, currently at $2,648 and $2,647 per ounce, respectively. A break below these levels could lead to further declines, with the 200-day moving average at $2,515 per ounce providing additional support.
