Gold Falls As Strong US Dollar, Trump’s Policies Weigh

Fundamental Analysis

* Dollar Pressure: Gold prices suffered their worst weekly performance in five months, dropping sharply as speculation around a second term for Donald Trump raised concerns about a renewed escalation in trade tensions, supporting the U.S. Dollar. In overnight news, Bloomberg reported that BlackRock and JPMorgan warned the sell-off in U.S. bonds is “far from over,” suggesting that Trump’s fiscal policies could reignite inflation and widen the budget deficit. This has led traders to scale back expectations for significant Federal Reserve rate cuts. Additionally, rumors that Robert Lighthizer, a staunch supporter of Trump’s tariffs, may lead the U.S. trade office further unsettled investors.

Technical Analysis

* Technical Breakout: Gold price was traded lower following prior breakout below the previous support level 2625.00. MACD which illustrate bearish momentum signal suggest the commodity to further extend its losses.

* Resistance and Support: If the bearish momentum persists, there’s a strong likelihood that the price will potentially head towards the level 2580.00. Conversely, a potential reversal is also to be expected and the price could head back towards 2675.00 after it breach back above the level 2625.00.

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Potential Risks

Looking ahead, investors will closely watch key U.S. economic data releases, including CPI, PPI, and Retail Sales this week for further direction and insights into economic momentum.

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Monitoring

Stay updated on US data, central bank updates and any shifts in the US Dollar’s strength by following PU Prime’s market insights and daily financial news.

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Disclaimer: Trading derivatives involves high risks, and market conditions can change rapidly. The content is for informational purposes only and should not be considered as financial advice. Traders should conduct their own research and consider risk management strategies.