Gold holds above $2,700 despite bearish calls now that Trump heads into office
LONDON (January 20) Gold’s price (XAU/USD) is holding above $2,700 despite an earlier decline during the Asian session, where traders remain concerned over President-elect Donald Trump, who will be sworn in as the 47th United States (US) President later in the day. Traders are assessing what to do in their Bullion positioning with concerns about Trump's policies, including tariffs and immigration, which could boost Gold's value as a haven but also lift the US Dollar (USD). Heightened political and trade uncertainties and geopolitical tensions fueled the recent gains in Gold.
Meanwhile, a minority group of bond traders believe the Federal Reserve's (Fed) next move on interest rates will be to increase them instead of a rate cut as most market participants anticipate, Bloomberg reports. Based on options linked to the Secured Overnight Financing Rate (SOFR), those traders see about a 25% chance that the Fed’s next move will be to lift rates by year-end, according to an analysis by Bloomberg Intelligence. That would be disaster news for Gold, which, in normal conditions, has an inverse correlation with yields.
Daily digest market movers: Bolder calls for upside despite bearish fears
- State Street Global Advisors, one of the world’s largest investors, says Gold prices could reach $3,100 an ounce this year, extending the 2024 rally that pushed the precious metal to its biggest annual gain in 14 years, Financial Review reported.
- The recent Commitment of Traders (COT) publication from the Commodity Futures Trading Commission (CFTC) reveals that hedge fund managers have boosted their net long Gold and Silver calls to a 5-week high, according to Reuters.
- In the Middle East, a ceasefire in the Gaza region has begun taking hold as Hamas released three female hostages in exchange for 90 Palestinians held in Israeli prisons, Reuters reports.
FXStreet
