- Xau/USD is approaching record highs, with Goldman Sachs looking at a $3,100 target.
- Investment banks are projecting a 9% rise as a surge in central bank demand.
- Trump's tariff policy boosts fuel market uncertainty and gold's appeal.
- Federal Reserve officials remain cautious about inflation as they focus on FOMC minutes this week.
Gold prices surged more than 1% on Tuesday due to safe haven demand amid uncertainty over US President Donald Trump's controversial trade policy. The Xau/USD trades for $2,933 after bounces back a daily minimum speed of $2,892.
Financial markets remain rattled after US Trump equipment imposed plans to apply steel and aluminum imports and mutual obligations last week. So, after reaching $2,942 on February 11th, bullion prices are poised to challenge record highs.
Goldman Sachs has raised the Xau/USD price to $3,100 by the end of the year. This is because investment banks said that the “structurally high” central bank demand would add 9% to the price of non-Yielding Metals.
After Trump's victory on November 6th, Gold fell to $2,534, with more than 15.90% rallied with Haven and global central bank purchases. The World Gold Council (WGC) revealed that after Trump's victory, the central bank purchased more than 54% of more than 333 tons.
Gold traders should warn Federal Reserve officials have become slightly skeptical about getting the job done with inflation after the consumer price index (CPI) rises for five months . San Francisco Principal Mary Daly said, “Policy needs to be maintained at restrictions… I think we are really making progress on inflation.”
Market participants will watch the Federal Open Market Committee (FOMC) monetary policy decisions in January, as well as housing data, last week's first unemployment claims, and the release of S&P Global Flash PMI.
Daily Digest Market Movers: Gold Prices Benefit from Safe Haven Demand
- The yield on US 10-year financial obligations rose to 7 basis points (BPS) and is gaining a 4.55% yield.
- Real US yields are correlated inversely with bullion prices, increasing the 4.5 basis points to 2.086%.
- Federal Gov. Christopher Waller said his “baseline” expectations are that President Donald Trump's new trade restrictions have only a limited impact on prices.
- Meanwhile, Philadelphia Fed President Patrick Harker reaffirmed his support for maintaining a stable interest rate policy and acknowledged that inflation has continued to rise in recent months.
- U.S. housing openings are expected to fall from 1,499 million to 1.4 million in January. At the same time, building permits are expected to decrease from 1,482 million to 1,460,000 for the same period.
- The money market FED fund ratio is priced at 39 basis points, which the Fed will ease in 2025.
Xau/USD technology outlook: Gold-price Skyrocket exceeds $2,900
The gold price trend remains as buyers aim to clear an all-time high of $2,942. More important resistance levels are the $2,950 and $3,000 marks. If these levels are cleared, it should be said that Goldman Sachs estimated that Xau/USD would reach $3,100 by the end of the year.
To continue the bearish, sellers need to push the spot price of gold to under $2,900. The results reveal key support levels, such as the swing low of $2,877 on February 14th, followed by $2,864 on February 12th. With even more weakness, gold could fall to test its swing high of October 31 at $2,790.
Customs FAQ
Duties are customs duties imposed on the import or product category of a particular product. Tariffs are designed to help local producers and manufacturers become more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as a tool for protectionism, along with trade barriers and import allocations.
Although both tariffs and taxes generate government revenue to fund public goods and services, there are several distinctions. Customs duties are paid upfront at the port of entry, but taxes are paid at the time of purchase. Taxes are levied on individual taxpayers and businesses, and customs duties are paid by the importer.
There are two ways of thinking among economists regarding the use of customs duties. Some argue that tariffs are necessary to protect domestic industries and address trade imbalances, but others could raise them high in the long term, and the Tat's tariffs Some view it as a harmful tool that could damage the trade war by encouraging it.
During preparations for the November 2024 presidential election, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of the total US imports. During this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. So when Trump imposes tariffs, he wants to focus on these three countries. He will also use the revenue generated through tariffs to reduce personal income tax.
