Gold price rose for a second day on concern about President Donald Trump’s immigration policy and a weaker dollar. Gold future for April Delivery rallied for a second day to settle at $1,212.40 an ounce at 2:55 p.m. on the Comex in New York, making its biggest monthly gain since June.
The demand for gold increased quickly as Trump signed an executive order suspending entry by citizens from seven predominantly Muslim nations. He also fired the acting U.S. attorney general for refusing to enforce the order on Monday. The moves sparked investors’ concerns on uncertainty over recent protectionist and immigration policies.
“There’s a lot of uncertainty and a lot of backlash over recent administration policies and that’s causing uncertainty in the market, and then all of a sudden the gold market has come back to life,” Phil Streible, a senior market strategist at RJO Futures in Chicago, said in a telephone interview. “The Fed may be slightly more cautious. It’s one thing to bring back jobs, but it’s another thing to cause protests and instability.”
The Federal Reserve will start a two-day meeting on Wednesday, discussing the interest rates outlook. The Fed is expected to leave the interest rate unchanged.
“The Fed is expected to leave the policy unchanged,” said Naeem Aslam, chief market analyst with Think Markets, in a commentary. But if “Trump is successful in acquiring the approval of Congress for his fiscal spending, the Fed may have to up the notch in order to catch up with inflation. This could possibly move the dollar higher and gold lower.”