Gold prices begin the new week on a negative note, despite a minor USD recovery.
Gold price (XAUUSD) recovers some of its intraday losses, but maintains a negative trend through the first half of the European session, trading around $2,757-2,758. The US Dollar (USD) is making a solid recovery from a one-month low reached on Friday, and it appears to be a main factor imposing negative pressure on the commodity.
Fed rate cut bets and falling US bond yields limit USD gains and provide support.
The risk-off impulse and bets for further policy easing by the Federal Reserve (Fed) help limit the downside for the non-yielding yellow metal.
US President Donald Trump’s decision to put tariffs on all imports from Colombia reignites trade war fears and dampens investors’ desire for riskier assets. The worldwide flight to safety, together with the possibility that the Fed might lower interest rates again before the end of this year, sparks a fresh leg down in the US Treasury bond yields. This, in turn, limits the USD rebound and calls for prudence before predicting an extension of the Gold price’s retracement decline from near the all-time high.
Daily Market Update: Gold price stays down despite stronger USD; bears lack confidence amid trade war fears.
The US Dollar, which monitors the greenback against a basket of currencies, rises roughly 0.25% on Monday as fears over US President Donald Trump’s trade policy resurface, prompting some selling around the gold price.
Trump directed his administration to impose emergency 25% tariffs on all goods imported from Colombia after the Colombian government refused to allow two US military planes carrying deported migrants to land in the nation.
Trump has threatened to raise tariffs to 50% by next week if the Latin American country refuses to comply with his immigration policy, escalating trade war fears and dampening investors’ desire for risky assets.
Wall Street Journal (WSJ) stated that momentum is building among Trump’s advisers to impose 25% tariffs on Mexico and Canada as early as February 1,
The Wall Street Journal (WSJ) stated that momentum is building among Trump’s advisers to impose 25% tariffs on Mexico and Canada as early as February 1, without the need for negotiations or talks.
In the most recent development, the White House reported on Monday that Colombia has accepted to all of Trump’s requirements, including unconditional admission of all illegal aliens from Colombia returning from the United States.
Meanwhile, Trump stated last Thursday that he will insist that interest rates be reduced promptly, raising expectations that the Federal Reserve will slash borrowing costs further in 2025 and pulling US Treasury bond yields lower.
This could function as a headwind for the USD and assist limit the downside for the XAUUSD, therefore proceed with care before concluding that the recent positive advance over the last month or so has peaked.
Traders now focus at the US economic docket. Durable Goods Orders, the Conference Board’s Consumer Confidence Index, and the Richmond Manufacturing Index will provide some impetus later in the US session.
