Gold remains above the key USD 2,700 level despite a pullback
Find gold maintained levels above $2,700, marking a 0.51% gain for the week. Friday’s modest decline was attributed to profit-taking rather than a significant market turnaround. Earlier this week, gold hit a one-month high, coming within $65 of its all-time high of $2,790.17 set in October. Softer US core inflation data fueled speculation that the Federal Reserve could make multiple rate cuts, with markets eyeing the possibility of at least two cuts by the end of the year.
Market focus is on Trump’s trade policy
Traders are closely watching Trump’s inauguration and expected trade policies, which could lead to inflation and global trade tensions. The broad tariffs proposed by the new administration are seen as potential drivers of gold’s safe-haven appeal, given its ability to disrupt global markets. These concerns have led to increased hedging activity as investors seek protection against downside risks arising from policy uncertainty.
Fed Governor Christopher Waller’s comments on the potential for additional rate cuts have reinforced this bullish sentiment for gold, as lower interest rates typically benefit non-yielding assets.
The demand for safe havens reflects broader investor caution
Gold futures showed resilience, driven by safe-haven demand and short-covering in the New York futures market. Despite temporary headwinds from a stronger U.S. dollar, traders view gold as a hedge against potential disruptions related to tariffs and Trump’s fiscal policies. The precious metal also gained popularity as lower bond yields offset some of the dollar’s strength, maintaining its appeal for dollar-sensitive investors.
Gold price forecast: bullish momentum in focus
The short-term outlook for gold remains positive, supported by demand for safe havens amid geopolitical and economic uncertainties. Continuation of these gains will depend on expectations of further rate cuts by the Federal Reserve and continued weakness in the dollar. Investors should keep an eye on Trump’s policy announcements for possible market impacts.