- Gold prices continue to rise, heading toward nearly 1% gains on Tuesday.
- Markets remain cautious as traders prepare for elevated headline risks during President Trump’s first full day in office.
- Gold reaches a fresh two-month high at $2,732.70, approaching a key resistance zone near $2,790.
Gold prices (XAU/USD) surge on safe-haven inflows, breaking above a key technical resistance after U.S. President Donald Trump confirmed plans to impose 25% tariffs on Canada and Mexico starting in February. Additionally, Trump hinted at the possibility of extending tariffs to Silver and Gold, adding further uncertainty to the market. China was notably excluded from the immediate levies, according to Bloomberg.
The potential tariffs on precious metals have fueled market volatility, driving futures premiums to elevated levels. President Trump’s domestic policies remain a key factor supporting Gold’s bullish momentum, increasing demand for safe-haven assets.
Meanwhile, bond yields plummeted to 4.527% during Asian trading on Tuesday, following Monday’s closure for Martin Luther King Jr. Day, providing additional support for Gold’s upward trajectory.
Daily Digest Market Movers: Key Headlines to Watch
- Trump’s Tariff Surprise: During the signing of his first executive orders, President Donald Trump shocked markets by announcing that tariffs on Canada and Mexico will take effect as early as February. This unexpected move contradicted a Wall Street Journal report on Monday, which suggested the tariffs would be delayed until a task force was established, according to Bloomberg. The announcement triggered a sharp sell-off in the Canadian Dollar (CAD) and Mexican Peso (MXN).
- Universal Tariffs on the Horizon: Trump also confirmed that universal tariffs on all imports to the U.S. are being considered and will be implemented at a later stage, Reuters reports.
- Saudi Arabia Expands into Copper: Saudi Arabia’s investment mining fund is set to acquire a stake in Pakistan’s Reko Diq project, which is poised to become one of the world’s largest copper mines. This move aligns with the kingdom’s efforts to strengthen its presence in the precious metals sector, the Financial Times reports.
- US Yields Rebound: Following Monday’s closure for Martin Luther King Jr. Day, U.S. bond yields are reacting to recent developments. The 10-year Treasury yield dipped to 4.527% in early European trading before rebounding. Despite the recovery, it remains 5% lower than last week’s peak of 4.788%.
Technical Analysis: Gold’s Sweet Spot
Gold prices continue their upward momentum for a second consecutive day on Tuesday, supported by U.S. President Donald Trump’s selective tariff measures targeting Mexico and Canada while delaying levies on China. Though tariffs are typically bearish for precious metals, the potential imposition of tariffs on Gold and Silver has sparked a price surge, indicating that Gold’s rally may still have room to run.
However, profit-taking could trigger a pullback, potentially pushing Gold prices down to $2,700. The downward-sloping trendline from last week’s broken pennant chart pattern at $2,668 serves as the next support level. Further downside could see prices test the 55-day and 100-day Simple Moving Averages (SMAs), which converge around $2,646.
Currently, Gold is testing the $2,721 level, representing a double top from November and December. A decisive break above this level would open the path toward the all-time high of $2,790, which stands as the key resistance to watch.
