PT Rifan Financindo Berjangka – Gold Tracks for Weekly Gain as Tariff Threats Stoke Haven Demand
Gold held near the highest since October as traders weighed President Donald Trump’s latest tariff threat against Europe, along with his vow to push for more interest-rate cuts.
Bullion was trading near $2,754 an ounce and was on track for a weekly advance of about 2%, supported by haven demand amid uncertainty over the global economic outlook under the new US administration.
Trump told attendees at the World Economic Forum in Davos via video that he intends to hit Europe with import levies in a bid to bring manufacturing back to the US. Since being sworn in on Monday, the president has identified China, the EU, Canada and Mexico as potential targets for import levies, raising concerns about how other governments might respond that have underscored bullion’s appeal as a haven asset.
The president also said he would demand an immediate drop in US interest rates. While lower borrowing costs are typically bullish for precious metals, traders were cautious as monetary policy is set by the Federal Reserve alone. The central bank is due to make a rates decision next week.
Gold set a series of records last year, with gains driven by the Fed’s pivot to cutting interest rates, geopolitical tensions and central-bank buying. Traders are now also focusing on Trump’s domestic agenda, including his pledges to cut taxes and overhaul immigration. Such moves may erode the nation’s finances and reignite inflation, potentially complicating the Fed’s rate-cutting path.
Spot gold was steady for a second day at $2,755.35 an ounce at 8:04 a.m. in Singapore. The Bloomberg Dollar Spot Index was flat. Silver and palladium were little changed, while platinum edged up.
Source: Bloomberg
Gold prices steady amid mixed US economic signals
Gold’s price holds firm after sliding to a daily low of $2,735 amid elevated US Treasury bond yields. Economic data from the United States (US) showed the labor market is cooling, while market participants continued to digest US President Trump’s trade policy rhetoric. The XAU/USD trades at $2,755, virtually unchanged.
Bullion prices are set to finish the week with solid gains despite trimming some of their gains on Thursday.
Data from the US Department of Labor revealed that more Americans applied for jobless benefits during the week ending January 18, which usually would signal a weakening labor market. Nevertheless, the report showed that weather distortions and the fire in Los Angeles are the main reasons for this and will likely be reflected in subsequent releases.
The yellow metal’s last leg up was sponsored by the fall of the Greenback. According to the US Dollar Index (DXY), which measures the performance of the Greenback against a basket of six peers and usually correlates inversely to Gold, tumbled 0.08% to 108.06.
On Friday, the central bank bonanza begins with the Bank of Japan (BoJ) expected to hike rates by 25 basis points (bps). Next week, the Federal Reserve (Fed) and the European Central Bank (ECB) are up next with the former projected to keep rates on hold, while the ECB is foreseen cutting borrowing costs by 25 bps.
This week, the US economic docket will feature S&P Global Flash PMIs, housing data and the final release of University of Michigan (UoM) Consumer Sentiment for January. PT Rifan Financindo Berjangka.
Source: Fxstreet