Gold prices rose in Asian trade on Tuesday (1/21) as the dollar weakened sharply overnight, while traders tried to gauge US President Donald Trump's policies after his inauguration.

Spot gold prices rose 0.3% to $2,727.39 an ounce, while February gold futures rose 0.4% to $2,743.57 an ounce by 1:28 p.m. ET (06:28 GMT).

Gold traders are bracing for increased volatility as Trump begins his second term, with his anticipated policy announcements expected to influence market dynamics.

The precious metal, traditionally seen as a safe-haven asset, has held above a one-month peak. Current market sentiment is shaped by the interaction between potential shifts in US policy and the Federal Reserve's monetary stance.

Trump has vowed to impose new trade tariffs on his neighbors, and China to reduce its trade deficit. This could give the dollar new strength, thus affecting gold prices. The U.S. Dollar Index fell more than 1% overnight but bounced back in Asian hours, up 0.3%.

A weaker dollar typically pushes gold prices higher as it makes the metal cheaper for buyers using other currencies. Traders are closely watching Trump's moves to gauge their impact on gold's trajectory.

Other precious metals were mixed on Tuesday. Platinum futures fell 0.4% to $958.80 an ounce, while silver futures rose 0.6% to $31.30 an ounce.

Copper remains pressured as tariff concerns weigh

Among industrial metals, copper prices weakened as a combination of anticipated U.S. tariffs, the prospect of a stronger dollar and investor caution following Trump's inauguration weighed on the red metal.

During periods of rising tariffs and trade tensions, such as in mid-2018 and mid-2019, copper prices declined sharply as investors anticipated reduced demand from China, the world's largest copper consumer.

Source: Investing.com