Steady Ahead Of Trump’s Return To White House
Gold (XAU/USD) prices held above $2,700 despite earlier dropping to $2,689 during the Asian session, as traders remained concerned about President-elect Donald Trump, who will be inaugurated as the 47th President of the United States (US) today. Traders are assessing what to do with their Bullion positions with concerns about Trump’s policies, including tariffs and immigration, which could boost Gold’s value as a safe-haven asset but also lift the US Dollar (USD). Rising political and trade uncertainties and geopolitical tensions have fueled Gold’s recent rally.
Meanwhile, a small group of bond traders believe that the Federal Reserve’s (Fed) next move on interest rates will be a hike rather than a rate cut as most market participants anticipate, Bloomberg reported. Based on options tied to the Secured Overnight Financing Rate (SOFR), these traders see about a 25% chance that the Fed’s next move will be a rate hike by the end of the year, according to analysis by Bloomberg Intelligence. That would be disastrous news for Gold, which, under normal conditions, has an inverse correlation with yields.
Source: FXStreet
