PT Rifan Financindo Berjangka – Gold Down as Trump’s Tariff Threats on Canada, Mexico Help Dollar
Gold fell as the dollar jumped after President-elect Donald Trump threatened 25% tariffs on imports from Canada and Mexico.
Trump said the import duties were needed to curb migrants and illegal drugs flowing across the U.S. border, while also vowing to impose additional 10% tariffs on Chinese goods. A stronger dollar dented bullion’s appeal by making it more expensive for many buyers.
Bullion traded near $2,620 an ounce after dropping 3.4% in the previous session as easing tensions in the Middle East sapped demand for safe-haven assets. Israel’s security cabinet is expected to vote on a cease-fire agreement with Lebanon’s Hezbollah on Tuesday, and its ratification is considered likely, an Israeli official said.
The precious metal is still up more than 25% this year, supported by central bank buying and the Federal Reserve’s shift to interest rate cuts. Many analysts remain positive on the outlook, with Goldman Sachs Group Inc. and UBS sees further gains in 2025.
“Investors are increasingly pricing in an American ‘Golden Age’ with pro-market — and pro-crypto — cabinet choices while the U.S. debt and deficit story is being pushed out,” said Nicky Shiels, Geneva-based head of metals strategy at MKS PAMP SA. “Gold needs to get back to $2,500, not $3,000, in the short term.”
Spot gold fell 0.1% to $2,621.45 an ounce by 8:29 a.m. in Singapore after dropping as much as 0.8% earlier.
The Bloomberg Dollar Spot Index rose 0.5%, after dropping 0.5% in the previous session. Silver, platinum and palladium all fell slightly.
Investors are now focused on the Fed’s interest rate meeting next month, with several reports this week that could provide clues about the decision. The data include the central bank’s November meeting minutes, consumer confidence and personal consumption expenditures data, the monetary authority’s preferred measure of inflation.
Source: Bloomberg
Gold Prices Drop on Middle East Ceasefire
Gold prices (XAU/USD) fell during the North American session on Monday (11/25) as news of a ceasefire between Lebanon and Israel spread, dampening appetite for riskier assets. This, along with the appointment of Scott Bessent as Treasury Secretary for the Trump administration, weighed on the yellow metal. XAU/USD is trading at $2,620, down more than 3%.
The increased risk appetite is driving the movement in Gold prices. The non-yielding metal has fallen below its 50-day Simple Moving Average (SMA) of $2,664, opening the door for further downside.
Market participants welcomed Bessent’s appointment. UBS Commodity Analyst Giovanni Staunovo commented, “Some market participants see him as less negative about the trade war, given his comments on a gradual approach to implementing tariffs.” According to Joaquin Monfort, an analyst at FX Street, Bessent advocates a “three-three” policy. The policy suggests that he will try to reduce the US deficit by 3% of the annual Gross Domestic Product (GDP), achieve an annual GDP growth rate of 3%, and increase US Crude Oil production by 3 million barrels per day.
A recent report revealed by Axios revealed that Israel and Lebanon are close to agreeing on terms to end the Israel-Hezbollah conflict, which has lifted Gold prices to record highs.
Bullion traders are also eyeing the release of Consumer Confidence data, the latest Federal Open Market Committee (FOMC) Meeting Minutes, Initial Jobless Claims, and the Fed’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) Price Index. PT Rifan Financindo Berjangka.
Source: FXStreet