Each ounce of gold decreased by nearly 50 USD after the U.S. President withdrew the warning about tariffs on Europe.
At the opening of the trading session on January 22, the spot gold price worldwide has decreased by 46 USD, to 4,786 USD per ounce. Previously, the price had at one point reached a record 4,888 USD during the session on January 21 due to investors' demand for refuge as U.S.-Europe tensions rose.
However, the market this morning has cooled down after U.S. President Donald Trump announced that he and NATO Secretary General Mark Rutte have reached a framework for an agreement on Greenland that he feels satisfied with. Therefore, he withdrew the warning about tariffs on Europe last week.
The global gold price turned to decrease in the morning session of January 22. Chart: Kitco
The U.S. stock market also brightened thanks to this information. The S&P 500 index closed the session up 1.1% to 6,875 points. DJIA rose 1.2%, equivalent to 588 points.
"The U.S. withdrawing the tariff warning has lifted Wall Street, somewhat putting pressure on precious metals. However, this is just news-driven movement and cannot reverse the upward trend of gold prices," Bob Haberkorn - a market strategist at RJO Futures commented.
Gold is considered a store of value during periods of economic-political volatility. The price of precious metals increased by 64% last year and 11% this year.
On January 21, the U.S. Supreme Court heard arguments from both sides in the case where President Trump wants to fire Fed Governor Lisa Cook. The judges expressed doubts about Mr. Trump's ability to do this. The case is of interest because it relates to the Fed's ability to operate independently.
Next week, the Fed will have a policy meeting. This agency is expected to keep interest rates unchanged this quarter and may extend until Chairman Jerome Powell's term ends in May. Gold will perform well in a low-interest-rate environment.
The world silver price this morning also fell, currently at 90.9 USD per ounce. During the session, the price once hit a peak of 95.87 USD.
"The price of gold reaching three digits is feasible, given the current upward trend. However, the price will not rise straight to that level, but will occasionally adjust," Soni Kumari - a commodities analyst at ANZ commented.
The price of platinum fell 0.1% to 2,460 USD per ounce. Palladium also dropped 2.1%, closing at 1,825 USD.
