January 21, 2025
New Delhi, India
Gold Price Today(XAU/USD)
Current Movement:
Gold (XAU/USD) extended its rally for the second straight day, reaching $2,729, its highest since November 6. The rise follows a bounce from $2,689, driven by safe-haven demand.
- Key Drivers:
- Trump’s Tariff Remarks: US President Donald Trump proposed 25% tariffs on Canada and Mexico, fueling inflation concerns and increasing demand for gold as a safe haven.
- Falling US Bond Yields: Bets on two potential Federal Reserve rate cuts this year pushed 10-year Treasury yields to a three-week low.
- Inflation Signs: US PPI and CPI data showed easing inflationary pressures, reinforcing expectations of Fed rate cuts.
Market Dynamics:
- US Dollar Recovery:
Despite its recent slump to a two-week low, the US Dollar gained support from expectations that Trump’s policies could boost inflation, leading the Fed to maintain a hawkish stance. - Risk Sentiment:
The Israel-Hamas ceasefire and optimism around potential US-Russia negotiations over Ukraine improved global risk sentiment, limiting gold’s upside potential. - Upcoming Data:
Market attention will turn to the Bank of Japan’s policy meeting on January 23-24 and the release of flash PMI data for insights into global economic health.
Outlook for Gold:
While the positive risk tone and USD strength may cap gains, the underlying sentiment remains bullish. Traders will closely monitor geopolitical developments and central bank actions for further cues.
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