Gold has a long road to recovery after Nvidia rout clouded its outlook for a fresh all-time high

NEW YORK (January 28) Gold’s price (XAU/USD) is still knocked out and unable to recover from its drop on Monday, currently trading at around $2,743 at the time of writing on Tuesday, following an over 1% dive the previous day after the Chinese AI startup DeepSeek shook up markets. The result is not tiny, with over $550 billion in market capitalization going up in smoke for Nvidia alone. Seeing the tech-sensitivity, cryptocurrencies such as Bitcoin also took it on the chin, with Bitcoin (BTC) losing over 6.5% at one point among one of the spillover victims in the financial markets asset classes. 

This plays into the hands of United States (US) President Donald Trump, who again demanded global tariffs. The belief is that doing so will better defend US tech companies and shield them from China’s dumping strategy. The rule of thumb remains that tariffs are inflationary, which means higher yields, which is a headwind for Bullion. 

Later this week, the Federal Reserve (Fed) and the European Central Bank (ECB) will decide on policy interest rates on Wednesday and Thursday, respectively. 

Daily digest market movers: Push and pull on tariffs

• Asian markets will quiet down this week and next week. With the Lunar New Year starting this Tuesday, Chinese traders will return to the markets on February 5. 
• The Financial Times reported that Treasury Secretary Scott Bessent is pushing for universal tariffs on US imports to start at 2.5% and rise gradually, citing unnamed sources. President Trump subsequently said that he wants across-the-board levies that are “much bigger” than that, Bloomberg reported. 
• The CME FedWatch tool projects no change in the policy rate for Wednesday's Federal Reserve interest rate decision. Going forward, the probability of a 25 basis point rate cut in the May rate decision is 40.0%, compared to 51.5% for no change. 
• Barrick Gold (ABX CN) and Mali will begin new negotiations on Tuesday. Barrick Gold and Mali will attempt to resolve a dispute over the alleged non-payment of taxes and the seizure of Barrick’s gold stocks by authorities in the country, Reuters reports. 

FXStreet