On Wednesday (January 22), spot gold fluctuated narrowly at a high level in the Asian market, currently trading around $2743.70 per ounce. Gold prices surged 1.39% on Tuesday, reaching a new high of $2745.83 per ounce in over two months and closing at $2744.59 per ounce. Supported by the weakening of the US dollar and the uncertainty of potential tariffs imposed by US President Trump, the market is flocking to safe haven gold.

The US dollar index fell back after being blocked from rebounding on Tuesday, hitting a two-week low of 107.86 during trading and closing down 0.12% at 10794, causing the price of gold to decrease for holders of other currencies.

Daniel Ghali, a commodity strategist at TD Securities, said, "Tuesday's trend is mainly related to the threat of a package of tariffs imposed by the United States after Trump's inauguration. Information about potential tariffs is being released bit by bit“

Trump did not provide any specific details regarding the imposition of universal tariffs or additional surcharges on major trading partners, which was an important aspect of his campaign. This once made the market ecstatic,

However, he hinted that tariffs on Canadian and Mexican goods could be imposed as early as February 1st. He stated that he is considering imposing a 25% tariff on Mexico and Canada as early as February 1st. This news quickly reversed the global stock market's upward trend and provided safe haven support for gold prices.

Canadian Prime Minister Trudeau reiterated on Tuesday that if US President Trump imposes tariffs on Canada, the Canadian government is prepared to respond to various situations.

When asked about the uncertain timeline for potential tariffs, Trudeau said that Trump is a skilled negotiator who likes to surprise his negotiating partners.

Trudeau said, "Trump's actions have indeed brought uncertainty," adding that he has had "frequent" conversations with Trump. "As for the formal interactions that follow, please continue to follow.

Volatility is clearly showing signs of rebounding, and after the relatively calm trend during Biden's tenure, any tariff rhetoric from the Trump administration in the foreign exchange market is about to explode, "said Helen Given, a foreign exchange trader at Monex USA." However, Trump's tariff proposals are still just suggestions. "Traders are trying to proactively address tariff risks in Mexico and Canada, but attempting to hedge around these actions before they materialize will make the market very unstable, as seen on Tuesday. "

What you see here is also how crowded the long positions in the US dollar are, "said Erik Bregar, Director of Foreign Exchange and Precious Metals Risk Management at Silver Gold Bull in Toronto." All you need is some ambiguity about tariffs, and then you will see this trend

US President Trump also stated on Tuesday that if Russian President Putin refuses to negotiate an end to the Ukraine war, he may impose sanctions on Russia. This also provides safe haven support for gold prices.

Trump did not disclose specific details of possible additional sanctions. Since the Russia-Ukraine conflict, the United States has imposed severe sanctions on Russia.

Trump said his administration is still studying the issue of sending weapons to Ukraine and he believes the EU should do more to support Ukraine.

During the morning session in Sanya (Tuesday evening local time), Trump announced that tariffs will be imposed on the European Union. Affected by this news, the euro fell by about 30 points in the short term, and the gold price did not fluctuate much in the short term, but investors need to pay attention to the further fermentation of market sentiment.

Peter Grant, Vice President and Senior Metals Strategist at Zaner Metals, reminds that the market may still be waiting for next week's Federal Open Market Committee (FOMC) meeting and personal consumption expenditure (PCE) price index, especially inflation data. I don't think anyone would expect the Federal Reserve to take any action next week, but they will definitely closely monitor the policy statement for hints about the remaining time of the year. "

Analysts say that Trump's immigration, tax, and tariff policies may promote economic growth but also stimulate inflation.

It is expected that the Federal Reserve will maintain interest rate stability this month, but remain vigilant about inflation. According to calculations by the London Stock Exchange Group (LSEG), the market expects the Federal Reserve to cut interest rates by about 38 basis points this year, and may resume cutting rates at its June meeting.

There is relatively little economic data on this trading day, so we will continue to pay attention to Trump's related dynamic news and market sentiment changes, and pay attention to the Davos Economic Forum and the speeches of ECB President Lagarde.