|

Temporary setback for Gold? – Commerzbank

After US President Trump backtracked significantly on both tariffs against China and the dismissal of Fed Chair Powell, the price of Gold temporarily fell back below $3,300 per troy ounce, Commerzbank's FX analyst Thu Lan Nguyen notes.

Gold is likely to remain in demand as a safe haven

"However, as it remains unclear when and in what form an agreement with the Chinese leadership is possible - there have been different statements on this from Trump, US Treasury Secretary Scott Bessent and Beijing - Gold is likely to remain in demand as a safe haven for the time being. In addition, both Fed Governor Christopher Waller and Cleveland Fed President Beth Hammack have fuelled hopes of interest rate cuts with their latest statements."

"Waller would expect more and faster interest rate cuts if the situation on the labour market deteriorates significantly due to the tariffs. Hammack, meanwhile, could imagine a first interest rate cut as early as June, depending on the data. Although the market-based US interest rate expectations did not move sustainably as a result - a first move is still expected by the majority in the summer - many market participants are now likely to feel strengthened in their expectations, which is also a support for the Gold price."

"In addition to the statements from the White House, attention will now be focussed on the economic data from the US. If these already show clear signs of a slowdown in US tariff policy, the price of Gold could quickly rise again."

Author

FXStreet Insights Team

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

More from FXStreet Insights Team
Share:

Editor's Picks

EUR/USD: US Dollar to remain pressured until uncertainty fog dissipates

Unimpressive European Central Bank left monetary policy unchanged for the fifth consecutive meeting. The United States first-tier employment and inflation data is scheduled for the second week of February. EUR/USD battles to remain afloat above 1.1800, sellers moving to the sidelines.

GBP/USD softens to near 1.3600 as BoE hints further rate cuts

The GBP/USD pair loses ground to near 1.3610 during the early Asian session on Monday. The Pound Sterling softens against the Greenback amid growing expectations of the Bank of England’s interest-rate cut. Traders will take more cues from the Fedspeak later on Monday.

Gold holds gains near $5,000 as China's gold buying drives demand

Gold price clings to the latest uptick near $5,000 in Asian trading on Monday. The precious metal holds its recovery amid a weaker US Dollar and rising demand from the Chinese central bank. The delayed release of the US employment report for January will be in the spotlight later this week.

Bitcoin Weekly Forecast: The worst may be behind us

Bitcoin price recovers slightly, trading at $65,000 at the time of writing on Friday, after reaching a low of $60,000 during the early Asian trading session. The Crypto King remained under pressure so far this week, posting three consecutive weeks of losses exceeding 30%.

Weekly column: Saturn-Neptune and the end of the Dollar’s 15-year bull cycle

Tariffs are not only inflationary for a nation but also risk undermining the trust and credibility that go hand in hand with the responsibility of being the leading nation in the free world and controlling the world’s reserve currency.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.