Gold price nears record high on weak US Dollar
Gold price extended its weekly gains, poised to challenge the all-time high of $2,790 rather sooner than later. Comments by United States (US) President Donald Trump could be the catalyst that pushes the yellow metal higher, though he surprised traders as he might refrain from imposing duties on Chinese products. The XAU/USD trades at $2,772, up 0.60%.
The market mood shifted slightly negatively even though Trump has eased the trade policy rhetoric against allies and adversaries. US economic data on Friday hinted that manufacturing activity improved in December, according to S&P Global, while Consumer Sentiment deteriorated, reported the University of Michigan (UoM) final survey for January.
However, Trump’s harsh rhetoric is not limited to the trade deficit. At the World Economic Forum (WEF) he added that he would demand lower interest rates.
After his remarks, the Greenback tumbled and remains on the defensive, as seen by the US Dollar Index (DXY), which tracks the American currency's value against a basket of six currencies. It edges down 0.62% to 107.44.
The buck is set to end the week with losses of 1.77% in the first week of US President Donald Trump in office.
Next week, the US economic docket will feature the release of Durable Goods Orders, the Federal Reserve’s (Fed) interest rate decision, Gross Domestic Product (GDP) figures and the Fed’s preferred inflation gauge, the Core Personal Consumption Expenditures (PCE) Price Index.
Gold price rose ignoring the advance of real yields. Measured by the 10-year Treasury Inflation-Protected Securities (TIPS), yield sits at 2.23%, up by one and a half basis points (bps).
The US 10-year Treasury bond yield slides two bps during the day at 4.625%.
US S&P Global Manufacturing PMI for December improved from 49.4 to 50.1, above estimates of 49.6. Meanwhile, the Services PMI dipped from 56.8 to 52.8, missing forecasts of 56.5
The University of Michigan Consumer Sentiment Final forJanuary expanded by 71.1, below estimates of 73.2 and the preliminary reading of 74.0.
Existing Home Sales in December rose by 2.2% MoM, from 4.15 million to 4.24 million.
Market participants are pricing in near-even odds that the Fed will cut rates twice by the end of 2025 with the first reduction occurring in June.(Cay)
Source: Fxstreet
