Spot Gold Prices Whipsaw on Geopolitical Risk and Trump Tariff Threat
The precious yellow metal was grappling with significant losses from the previous session after multiple reports indicated that a ceasefire between Israel and Lebanon was imminent, reducing demand for safe-haven assets.
However, traders continued to eye the shiny metal, with demand for safe havens still lingering as President-elect Donald Trump seemed to remind markets who was in control.
He pledged a 25% tariff on goods from Mexico and Canada and a 10% tariff on Chinese imports upon taking office.
Investors were also processing the news that Trump had nominated Wall Street veteran Scott Bessent as Treasury Secretary.
Meanwhile, volatile swings in the US Dollar (DXY) resumed, fluctuating between 106.58 and 107.25 before settling at 107.10.
Market volatility is expected as traders adjust positions ahead of the Fed’s next move.
This week’s economic data, including the US FOMC Minutes, Prelim GDP, and Core PCE, will be pivotal in shaping expectations for future Fed policy.
Traders will look for clues in the FOMC Minutes regarding the Fed’s stance on interest rates and inflation.
Hawkish signals could support the US Dollar, while dovish tones may lead to weakness in the greenback.
Technically, the Relative Strength Index (RSI) has weakened, indicating a mixed bias. Similarly, the Moving Average Convergence Divergence (MACD) also reflects a mixed stance, while the Average Directional Index (ADX) suggests a ranging market.
Given these conflicting signals, further whipsaw movement is expected as the market attempts to establish a clear bullish trend.
Daily Chart Spot Gold
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