Gold powers through after Trump dials down tone on China tariffs
LONDON (January 24) Gold’s price (XAU/USD) is rallying further, trading at $2,778 at the time of writing on Friday, and could hit a fresh all-time high at any moment after US President Donald Trump surprised with comments the previous day casting doubts on the application of tariffs on China. The comments came after Trump had a phone call with China’s President Xi Jinping. Meanwhile, US yields are retreating after the Bank of Japan (BoJ) hiked interest rates by 25 basis points.
In the economic data front, the US will receive its S&P Global Purchasing Managers Index (PMI) preliminary readings for January this Friday. The University of Michigan will close off the day with its Consumer Sentiment Index for January, the final reading. Headline risk might retake place with US President Donald Trump adding remarks on tariffs.
Daily digest market movers: Will markets believe this
- US President Donald Trump commented on his phone call with Chinese Prime Minister Xi Jinping that he does not want to impose tariffs on China and that a deal would be more constructive, Bloomberg reported.
- President Trump also talked about the Federal Reserve (Fed) and US rates, affirming that he would demand an immediate drop. While lower borrowing costs are typically bullish for precious metals, traders are cautious as monetary policy is set by the central bank, which is due to publish its interest rate decision next week, Bloomberg reports.
- US yields are off their weekly lows, with the US 10-year benchmark rate currently trading at 4.625%, recovering from its poor performance earlier this week at 4.528%. However, it still has a long way to go before it reaches the more-than-one-year high from last week at 4.807%.
FXStreet
