- Gold will increase by 0.56% despite thin liquidity on US President's Day.
- Geopolitical risks, US trade policy supports the long-term bullion outlook.
- Traders await FOMC minutes, Federal Reserve speakers and key economic data for the US.
Gold prices rose on Monday during the North American session, recording a profit of 0.56% amid thin trading as US (US) markets closed in compliance with President's Day. The Xau/USD traded at $2,898 after hitting a daily low of $2,878.
Last Friday, Gold registered its biggest loss since December 18th, but the precious metals outlook is promising in geopolitical uncertainty and US trade policy aimed at narrowing down deficits It looks like it.
Data from the US came in slightly heated last week with the Consumer Price Index (CPI) and Producer Price Index (PPI). Retail sales have disappointed investors. Investors rushed to prices for further easing by the Federal Reserve.
Fed officials are being cautious as inflation exceeds the 2% target. Philadelphia Fed President Patrick Harker said policy needs to be “stable” for now, emphasizing that monetary policy is in a good place. Harker added that the labour market is solid and that the policy should focus on lowering inflation.
Recently, Fed Gov. Michelle Bowman said he expects inflation to decline, but she acknowledged that there remains an upside risk.
This week, US Economic Docket features more Fed speakers, housing data, the latest Federal Open Market Committee (FOMC) meeting minutes, first unemployment claims, and final reading of the S&P Global Flash PMI in February.
Daily Digest Market Movers: Gold Prices Benefit from Safe Haven Demand
- The US 10-year Treasury bond yield tanked 4 basis points (BPS) on Friday, sitting at 4.478%.
- Real US yields have reduced the Xau/USD tailwind four basis points to 2.039%, inversely proportional to bullion prices.
- The World Gold Council revealed that the central bank had purchased more than 1,000 tonnes of gold in 2024 for the third consecutive year. Following Trump's election victory, central bank purchases have skyrocketed over 333 tons, over 54%.
- The money market FED fund ratio is priced at 43 basis points, which the Fed will ease in 2025.
Xau/USD technology outlook: Gold price rises to $2,900
The upward trend in gold requires clearing the $2,900 figure, but clearing the $2,900 figure. If these two levels are cleared, the next ceiling level will be $2,950, followed by $3,000.
Conversely, Xau/USD could fall below $2,900, allowing it to challenge the Swing Low $2,877 on February 14th and the Low $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.
