Gold price (XAU/USD) surged toward $2,650 during the opening of the North American session on Thursday. Investors remain focused on the economic implications of President-elect Donald Trump’s upcoming policies. As a traditional safe-haven asset, gold’s appeal has strengthened due to mounting global uncertainty.
Trump’s Economic Policies and Gold Price Forecast
Expected policies under Trump’s administration, such as increased import tariffs and reduced taxes, are anticipated to impact the global economy significantly. Higher tariffs could escalate trade tensions, while tax cuts might drive inflation in the United States. During periods of uncertainty and inflation, gold historically performs well as a reliable hedge.
Lower Treasury Yields Favor Gold Investments
The 10-year US Treasury yield dropped to around 4.54% at the beginning of the year. This decline benefits gold by reducing the opportunity cost of holding non-yielding assets. Investors often turn to gold in such scenarios, boosting its demand and price.
US Dollar Strength and Inflation Expectations
The US Dollar (USD) continues to rise, fueled by inflation expectations. Many believe Trump’s economic strategies will pressure the Federal Reserve to ease monetary policies moderately. The US Dollar Index (DXY), measuring the Greenback against six major currencies, climbed to a two-year high of 108.90.
On the economic front, recent data revealed a decline in US Initial Jobless Claims for the week ending December 27. The Department of Labor reported a figure of 211K, better than the expected 222K and the previous 220K. This development has further bolstered USD strength.
Gold Technical Analysis
Gold’s daily chart highlights a Symmetrical Triangle pattern, signaling decreased volatility. The 20-day Exponential Moving Average (EMA) around $2,630 aligns closely with current prices, indicating a neutral trend.
The Relative Strength Index (RSI) hovers between 40 and 60, showcasing indecision among market participants. A break above December’s high of $2,726 could push gold higher, while a drop below November’s low of $2,537 might trigger a bearish trend.
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