- Gold rises 0.87%, maintaining profits while the market navigates the implications of US tariffs in global trade.
- The American dollar index reaches a maximum of two weeks, subsequently retreating while the delay of tariffs between the US and Mexico moderates the impulse.
- Investors focus on the upcoming non -agricultural payrolls in the US and Fed communications.
The price of gold reached a record on Monday after the US initially scheduled tariffs on Canada, Mexico and China, which caused flows to the attractiveness of secure metal shelter without performance. At the time of writing, the XAU/USD quotes at $ 2,821 above its opening price at 0.87%.
The feeling of the market has improved, but the golden metal maintains the previous profits. The tariffs have been the main promoter of the markets since the president of the United States, Donald Trump, assumed the position. The dollar began the week with good foot after the US imposed 25% tariffs on two of its largest commercial partners and 10% to China.
The American dollar index (DXY) reached a maximum of two weeks of 109.88, but the news that the US is delaying tariffs to Mexico due to an agreement between the two countries weighed on the dollar, providing an impulse to the XAU/ USD
Meanwhile, tariffs on Canada and China remain in force, scheduled to start on Tuesday. However, US President Trump said he would hold conversations with Canada’s Prime Minister Justin Trudeau.
Passing the economic drivers, the Institute for Supply Management (ISM) revealed that business activity in the US manufacturing sector improved. In addition, the operators will be attentive to US data, with the publication of non -agricultural payrols (NFP) of the US for January and Federal Reserve officials (FED) crossing the news.
Daily market summary: The price of gold driven by the fall of the US treasure yields.
- The 10 -year American treasure bonus yield falls a basic point and a half to 4,537%. The real US yields, measured by treasure bonds against inflation (Tips) at 10 years, remain unchanged at 2,095%.
- The ISM manufacturing PMI for January rose to 50.9, exceeding the expectations of 49.8 and improving from the reading of December 49.2, pointing out an improvement in business activity. A more detailed analysis of the data shows that the paid price subcomponent increased from 52.5 to 54.9, indicating higher supplies costs. In addition, the employment index showed a significant improvement, from 45.4 in December to 50.3, reflecting better employment conditions within the sector.
- Bart Melek, head of commodities strategies at TD Securities, commented that the market is not fully aware of the magnitude of the commercial war. “We have not seen a complete response of gold, and if this commercial war continues for a considerable period, it could lead to significantly higher gold prices in the future,” he added.
- The president of the Boston Fed, Susan Collins, said that the Fed could be patient with the cuts of fees due to tariff uncertainty.
- The president of the Fed of Atlanta, Raphael Bostic, said that the Fed needs to bring 2% inflation for the credibility of the institution. He added that the labor market is solid and wants to see what the 100 basic points of flexibility last year mean for the economy.
- Futures of the money market now discount 44 basic points of fees of fees of the Fed in 2025, with the operators anticipating the first movement in June.
Xau/USD technical perspective: The price of gold remains bullish while buyers point to $ 2,850
The upward trend of the gold price resumed on Monday when the yellow metal reached a historical (ATH) of 2,830 $. A greater rise is expected in the midst of geopolitical uncertainty due to the imposition of tariffs by the US, the conflict in the Middle East and the war between Russia and Ukraine.
If the Xau/USD exceeds $ 2,830, the next resistance would be the 100% Fibonacci level about $ 2,844 as part of the upward stretch from January 25 to 31, which can be seen in the 4 -hour graph below. If it is exceeded, the next resistance will be the Fibonacci extension of 161.8% in 2,889 $, before $ 2,900.
On the contrary, if the sellers exceed the simple mobile average (SMA) of 50 periods in $ 2,770, this will be followed by the minimum of January 27, $ 2,730. The next stop below would be $ 2,700.
FAQS GOLD
Gold has played a fundamental role in the history of mankind, since it has been widely used as a deposit of value and a half of exchange. At present, apart from its brightness and use for jewelry, precious metal is considered an active refuge, which means that it is considered a good investment in turbulent times. Gold is also considered a coverage against inflation and depreciation of currencies, since it does not depend on any specific issuer or government.
Central banks are the greatest gold holders. In their objective of supporting their currencies in turbulent times, central banks tend to diversify their reserves and buy gold to improve the perception of strength of the economy and currency. High gold reserves can be a source of trust for the solvency of a country. Central banks added 1,136 tons of gold worth 70,000 million to their reservations in 2022, according to data from the World Gold Council. It is the largest annual purchase since there are records. The central banks of emerging economies such as China, India and Türkiye are rapidly increasing their gold reserves.
Gold has a reverse correlation with the US dollar and US Treasury bonds, which are the main reserve and shelter assets. When the dollar depreciates, the price of gold tends to rise, which allows investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rebound in the stock market tends to weaken the price of gold, while mass sales in higher risk markets tend to favor precious metal.
The price of gold can move due to a wide range of factors. Geopolitical instability or fear of a deep recession can cause the price of gold to rise rapidly due to its condition of active refuge. As an asset without yield, the price of gold tends to rise when interest rates lower, while the money increases to the yellow metal. Even so, most movements depend on how the US dollar (USD) behaves, since the asset is quoted in dollars (Xau/USD). A strong dollar tends to keep the price of gold controlled, while a weakest dollar probably thrusts gold prices.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
