Gold price have been dropping for the second day in a row. The main reason for this is the strength of the US Dollar (USD). The USD has been rising because of positive feelings about Donald Trump’s economic plans. This is making gold less attractive to investors. In this article, we will look at why gold prices are falling, how inflation is affecting the market, and what to expect next.
The Strong US Dollar is Pushing Gold Prices Down
The US Dollar is getting stronger, partly because investors are hopeful about Donald Trump’s economic plans. These include more government spending and tax cuts. As the USD becomes stronger, gold price tend to fall. This happens because gold doesn’t earn interest, while the USD can offer better returns.
Trump’s plan to add a 10% tariff on US imports could cause inflation. Higher inflation means the Federal Reserve may not cut interest rates as much, which could help keep the USD strong and continue to hurt gold prices.
Investors Are Waiting for Key Economic Data
Investors are being careful right now, as they wait for important economic reports. These include US consumer inflation data, which will be released later this week. Investors are also waiting for speeches from the Federal Reserve, including from Chairman Jerome Powell. These reports and speeches could give clues about future interest rate changes and impact both the USD and gold.
Trump’s Economic Plans and Gold Prices
Many investors are still focused on how Trump’s victory affects the economy. His plans are helping the USD stay strong. However, his protectionist ideas, like trade tariffs, could cause problems in global markets. If this happens, investors might turn to gold for safety, which could push prices up.
In addition to inflation data, traders are also keeping an eye on reports like the US Producer Price Index and Retail Sales figures. These could give more information on how the economy is doing and influence gold prices.
What the Charts Say About Gold’s Future
Looking at the price charts, gold is close to important support levels. If prices keep falling, gold might find support around $2,660. If prices drop below $2,643, we could see a further decline, possibly down to $2,605.
On the other hand, if gold prices rise above $2,700, they will face resistance around $2,718 and $2,740. If gold can break through these levels, it might rise to $2,750 or even reach the record high of $2,790 from October.
Conclusion
Gold prices are struggling right now because of the strong US Dollar. This is mainly due to Trump’s economic plans. Investors are waiting for key reports and comments from the Federal Reserve to see what happens next. If there is more uncertainty in global markets, gold might see a rise as a safe investment.
For more updates on gold prices, visit our Daily Gold Signal. Keep up with the latest gold news by checking our Daily Gold Update.
