Spot gold closed the week at $2,770 an ounce, not far from its historic peak of $2,788 an ounce in October last year. Gold futures for February 2025 on the Comex New York Mercantile Exchange were at $2,778 an ounce.

Gold prices have been rising as President Donald Trump’s economic policies have attracted investor interest. Gold is likely to be a strategic asset in a high inflation environment, experts say.

Mr. Trump's series of policies such as immigration reform, import and export taxes and withdrawal from international agreements, etc. have attracted the attention of financial markets.

Mr Trump has proposed imposing tariffs of around 25% on Canada and Mexico and 10% on Chinese imports starting February 1. Deutsche Bank estimates that these tariffs could push inflation from 2.9% in December to 3.7% by the end of 2025, potentially boosting overall inflation by 1.2%.

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World gold prices increase. Photo: Kitco

Trump’s proposed tax cuts and deregulation, while aimed at stimulating economic activity, would increase the national debt and federal deficit, which is a major driver of gold’s rally.

Geopolitical uncertainty adds to the appeal of gold. Trump’s assertive foreign policy approach has historically created tensions in global markets. Investors seek inflation protection and safe-haven assets.

Gold was also supported by a weak USD. The US Dollar Index (DXY), which measures the greenback's performance against six major currencies (EUR, JPY, GBP, CAD, SEK, CHF) stood at 107.47 points.

Investors are closely watching the trend of inflation and the actions of the Federal Reserve (Fed). Forecasting the path of the Fed's interest rate this year, nearly 65% ​​of economists predict two or fewer rate cuts this year.

President Trump has complicated the Fed’s job, analysts say. The Fed’s 2% inflation target is facing major challenges amid expected policy changes under Trump.

Interest rate decisions from the Fed and the European Central Bank are expected next week.

Meanwhile, the domestic gold market has begun the Lunar New Year holiday of At Ty 2025. At the end of the session on January 25, the price of gold bars at SJC closed at 86.8-88.8 million VND/tael (buy - sell).

The price of 1-5 chi SJC gold rings is listed at 86.3-88 million VND/tael (buy - sell). The price of 9999 gold rings at Doji closed the session at 86.6-88.1 million VND/tael.

Gold Price Forecast

Goldman Sachs analysts predict that inflationary pressures could significantly boost gold demand. As import costs and consumer prices rise, investors are likely to allocate more money to gold as a financial hedge. Gold acts as a hedge against inflation.

The threat of inflation will likely force the Fed to maintain a dovish stance for now, said market analyst Lukman Otunuga. Looking at the chart, prices are rising, with the next psychologically important level at $2,800 an ounce.

The prospect of a conflict between Trump and the Fed is creating uncertainty, which is benefiting gold, according to Ole Hansen, head of commodity strategy at Saxo Bank. He predicts that gold prices could reach $2,800 an ounce.