Under the heading of, Trump tariff concerns fuel gold rally- Dr. Renisha Chainani, Head- Research, Augmont said, Due to concerns about a global trade war and Trump’s tariffs, the price of gold continues to be optimistic. The Dollar Index is impacted by falling US bond yields, which also give the precious metal more support.
In addition to the 10% tax on Chinese imports and the 25% tariff on steel and aluminium, President Donald Trump has since taken office on January 20 announced intentions to impose further tariffs on timber, automobiles, semiconductors, and pharmaceuticals, further intensifying tensions in international trade.
Increasing geopolitical concerns, there have been rumours that Trump may sideline Kyiv and its European allies in talks with Russia by withdrawing US support for Ukraine. Wednesday’s social media flurry between US President Donald Trump and Ukrainian President Volodymyr Zelenskiy marked a new low in the two countries’ relationship.
Since Russia invaded Ukraine’s neighbour in 2022, there are increasing worries that Trump may end US assistance for the country. Volodymyr Zelenskiy has “better move fast” to negotiate an agreement with Russia, he stated on social media on February 19, Wednesday, “or he is not going to have a country left.” Thus, geopolitical uncertainty is being increased.
Minutes from the last FOMC policy meeting held in January released on Wednesday revealed officials noted a high degree of uncertainty that requires the central bank to take a careful approach in considering any further interest rate cuts. Additional events about the crisis between Russia and Ukraine may potentially have an impact on Gold’s performance. Trump referred to Ukrainian President Volodymyr Zelenskiy as a “dictator without elections” in a social media post, and he warned him to act quickly or face losing his nation.
According to Reuters’ reporting on the matter, “the Trump administration’s Ukraine moves in recent days have left European officials shocked and flat-footed.” Another leap up in gold prices might be triggered by a further
escalation of geopolitical tensions, with the US and the EU at odds on how to resolve the crisis.
Gold Apr Futures traded at a new record high of $2973 (~Rs 83560) on, February 20, Thursday, having cleared the resistance of $2965 (~Rs 86300) on the continued uncertain environment of tariffs. Prices are moving towards the next psychological resistance, targeting $3000 (~Rs 87200-300) and beyond. USD INR appreciation may limit gains in domestic markets.
In the row, Colin Shah, MD, Kama Jewelry casted his outlook on Gold Price & said, “Gold prices continued to gain strength last week. The rise in prices can be attributed to the heightened volatility, global uncertainties and the weak US data that has pushed gold prices further. US service-sector activity has also gone down to 2-year low, pushing the gold prices upwards.
Moving ahead, gold prices are expected to stay afloat on the back of continued global uncertainties. Trajectory of DXY and USD will be key to gold prices this week. With gold prices witnessing continuous hike, there is a possibility of near-term profit taking, however, mid to long-term bullishness momentum could be seen as well. We anticipate gold prices to scale levels of $3,000 in mid-term.”
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