Trump's major tariff remarks trigger a surge in gold prices! Gold prices soared $17 in a short period. How to trade gold?
During Asian market hours, spot gold prices surged $17 in a short period, nearing the $2720 per ounce mark, as Trump's tariff remarks fueled risk aversion.
Time:
2025-01-21 13:05
On Tuesday (January 21st), during Asian market hours, spot gold prices surged rapidly, jumping $17 in a short period and nearing the $2720 per ounce mark, driven by increased risk aversion due to Trump's tariff remarks.
On January 20th, at noon EST, Trump was sworn in as the 47th President of the United States in the Capitol Rotunda.
US President Trump recently stated that he plans to impose tariffs on Mexico and Canada by February 1st at the latest, with rates potentially reaching 25%, reiterating his belief that these two neighboring countries are allowing illegal immigration and drug trafficking into the US.
Trump said, "We're thinking about putting a 25% tariff on Mexico and Canada because they're letting massive numbers of people come across the border." Complaining about fentanyl and migrants crossing the US northern border, Trump called Canada "a very bad abuser" and said the target date for the tariffs would be "I think February 1st."
Trump made the remarks shortly after returning to the Oval Office to sign a series of executive orders covering a wide range of issues from regulation and energy to immigration.
This is an early indication of Trump's increased focus on trade after taking office. These remarks quickly fueled risk aversion in the market, strengthening not only gold but also causing a significant rise in the safe-haven currency, the US dollar.
It is anticipated that Trump's widespread trade tariffs will further stimulate inflation and trigger a trade war, potentially increasing the safe-haven appeal of gold.
David Meger, High Ridge Metals trading director, said, "The uncertainty surrounding the policies that Trump is about to implement has been one of the factors supporting gold."
Zain Vawda, OANDA MarketPulse market analyst, believes that the uncertainty surrounding Trump's tariffs and trade policies, and their potential impact on global economic growth, is likely to maintain the safe-haven demand for gold.
How to trade gold?
FXStreet analyst Christian Borjon Valencia points out that gold prices have broken through the $2700 per ounce mark but have yet to surpass the high of $2725 per ounce reached on December 12th of last year. Breaking this high would pave the way for buyers to test the psychological level of $2750 per ounce.
If these levels are broken, gold prices could move towards the record high of $2790 per ounce, and then $2800 per ounce.
On the other hand, Valencia adds that conversely, if sellers push gold prices below $2700 per ounce, the first support level would be the volatile low of $2656 per ounce on January 13th, followed by the convergence zone of the 50-day simple moving average (SMA) and 100-day SMA at $2642-2644 per ounce.
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