- Gold price attracts some haven flows amid worries about Trump’s tariff plans.
- The Fed’s hawkish shift and elevated US bond yields could cap the XAU/USD.
- Traders now keenly await FOMC minutes and US NFP releases later this week.
Gold price (XAU/USD) builds on its steady intraday ascent heading into the European session on Tuesday and climbs to a fresh daily high, around the $2,646-2,647 area in the last hour. The commodity, which is considered a hedge against rising prices, draws support from expectations that US President-elect Donald Trump’s policies could reignite inflation. Moreover, persistent geopolitical risks stemming from the protracted Russia-Ukraine war and tensions in the Middle East continue to act as a tailwind for the safe-haven precious metal.
Apart from this, the recent US Dollar (USD) pullback from a two-year peak turns out to be another factor that benefits the Gold price. That said, the Federal Reserve’s (Fed) hawkish signal that it would slow the pace of rate cuts in 2025, which remains supportive of elevated US Treasury bond yields, could cap gains for the non-yielding bullion. Traders might also refrain from placing aggressive directional bets ahead of this week’s release of the FOMC minutes and the US Nonfarm Payrolls (NFP) report on Wednesday and Friday, respectively.
Gold price attracts haven flows amid concerns about Trump’s tariff plans and geopolitical risks
- US President-elect Donald Trump’s proposed tariffs and protectionist policies are expected to stoke further inflation and disrupt global trade, offering support to the safe-haven Gold price.
- The Ukrainian military launched a new offensive in the Kursk region of western Russia on Sunday. Russia’s Defence Ministry said that Ukraine lost up to 340 soldiers in the Kursk region.
- As Israel’s relentless bombardment of Gaza continues, the Israeli military said on Sunday that it has been conducting operational raids in Syria amid accusations of cease-fire violations.
- The Federal Reserve’s projections in December implied a shift to a more cautious pace of rate cuts in 2025, with the majority of the policymakers expressing concern that inflation could reignite.
- San Francisco Fed President Mary Daly said on Saturday that despite significant progress in lowering price pressures over the past two years, inflation remains uncomfortably above the 2% target.
- Furthermore, Fed Governor Lisa Cook said on Monday that policymakers could be more cautious with further interest rate cuts, citing labor market resilience and still stickier inflation.
- The yield on the benchmark 10-year US government bond rose to an over eight-month high on Monday, assisting the US Dollar to attract some dip-buying on Tuesday and capping the XAU/USD.
- The market focus this week remains glued to the release of the FOMC meeting minutes and the closely-watched US Nonfarm Payrolls (NFP) report on Wednesday and Friday, respectively.
- In the meantime, Tuesday’s US economic docket – featuring the ISM Services PMI and JOLTS Job Openings data – could provide some impetus later during the North American session.
Gold price bulls have the upper hand while above the 100-day SMA pivotal support
From a technical perspective, the overnight resilience above the 100-day Simple Moving Average (SMA) and the subsequent bounce warrants some caution for bearish traders. Moreover, oscillators on the daily chart have recovered from negative territory, which, in turn, supports prospects for some near-term upside. Any further move up, however, is likely to confront some resistance near the $2,655-2,657 horizontal zone ahead of the $2,665 area, or the multi-week high touched last Friday. The momentum could extend further towards an intermediate resistance near the $2,681-2,683 zone en route to the $2,700 mark. The latter should act as a pivotal point, which if cleared will set the stage for an extension of a two-week-old uptrend.
On the flip side, the 100-day SMA, currently pegged near the $2,626 area, followed by the overnight swing low, around the $2,615-2,614 region, and the $2,600 mark could offer some support to the Gold price. This is followed by the December swing low, around the $2,583 area, which if broken will be seen as a fresh trigger for bearish traders and pave the way for deeper losses.
US Dollar PRICE Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.09% | -0.14% | 0.13% | -0.09% | -0.34% | -0.38% | -0.03% | |
| EUR | 0.09% | -0.05% | 0.20% | -0.00% | -0.25% | -0.30% | 0.04% | |
| GBP | 0.14% | 0.05% | 0.30% | 0.05% | -0.20% | -0.25% | 0.07% | |
| JPY | -0.13% | -0.20% | -0.30% | -0.22% | -0.46% | -0.53% | -0.19% | |
| CAD | 0.09% | 0.00% | -0.05% | 0.22% | -0.25% | -0.30% | 0.02% | |
| AUD | 0.34% | 0.25% | 0.20% | 0.46% | 0.25% | -0.05% | 0.27% | |
| NZD | 0.38% | 0.30% | 0.25% | 0.53% | 0.30% | 0.05% | 0.32% | |
| CHF | 0.03% | -0.04% | -0.07% | 0.19% | -0.02% | -0.27% | -0.32% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
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