Gold Prices Drop Due to US Dollar Strength and Tariff Policies
Hello, today we will take a look at the latest developments in the gold market and the factors that are significantly impacting the price of this precious metal.
Gold prices have reversed, with spot gold dropping by $19.8 to $2,638.2 per ounce. The strengthening of the USD during the last trading session of the first week of 2025 has put pressure on gold, pushing the precious metal further away from its three-week high reached in the previous session. Additionally, the US Dollar Index has recorded its strongest weekly growth since mid-November, making gold, which is priced in USD, less attractive to holders of other currencies.
One key factor driving the strength of the USD is the proposed tariffs by President-elect Donald Trump. These policies not only boost the US dollar but also create significant pressure on the metal markets. The proposed trade tariffs could affect most metals, and a slowdown in global trade, which often accompanies economic weakness, could reduce demand for precious metals.
Looking at the current chart, I believe gold may continue to decline. The nearest support level is at $2,640, and if gold fails to maintain this level, it could continue to fall towards the target of $2,575. However, if gold recovers slightly and holds the $2,640 support, a small bounce back might occur, pushing gold towards the resistance level at $2,670. Investors should closely monitor the impact of tariff policies, USD fluctuations, and market signals to adjust their strategy accordingly, with a suggested stop loss at $2,620.
Gold prices have reversed, with spot gold dropping by $19.8 to $2,638.2 per ounce. The strengthening of the USD during the last trading session of the first week of 2025 has put pressure on gold, pushing the precious metal further away from its three-week high reached in the previous session. Additionally, the US Dollar Index has recorded its strongest weekly growth since mid-November, making gold, which is priced in USD, less attractive to holders of other currencies.
One key factor driving the strength of the USD is the proposed tariffs by President-elect Donald Trump. These policies not only boost the US dollar but also create significant pressure on the metal markets. The proposed trade tariffs could affect most metals, and a slowdown in global trade, which often accompanies economic weakness, could reduce demand for precious metals.
Looking at the current chart, I believe gold may continue to decline. The nearest support level is at $2,640, and if gold fails to maintain this level, it could continue to fall towards the target of $2,575. However, if gold recovers slightly and holds the $2,640 support, a small bounce back might occur, pushing gold towards the resistance level at $2,670. Investors should closely monitor the impact of tariff policies, USD fluctuations, and market signals to adjust their strategy accordingly, with a suggested stop loss at $2,620.
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