{"id":100562,"date":"2025-02-11T15:02:07","date_gmt":"2025-02-11T13:02:07","guid":{"rendered":"https:\/\/ironfx-com-php8.wp-dev.int.theitops.net\/?p=100562"},"modified":"2025-02-11T15:02:08","modified_gmt":"2025-02-11T13:02:08","slug":"gold-outlook-safe-haven-demand-drives-prices-higher","status":"publish","type":"post","link":"https:\/\/www.ironfx-id.com\/ph\/gold-outlook-safe-haven-demand-drives-prices-higher\/","title":{"rendered":"Gold Outlook: Safe Haven Demand Drives Prices Higher"},"content":{"rendered":"

Since our last repor<\/a>t, gold\u2019s upward direction was maintained last week breaking to new record high levels by surpassing $2900\/ounce in today\u2019s Asian session. In today\u2019s report, we are to discuss the possible implications of the release of the US CPI rates for January and Fed Chairman Powell\u2019s testimony, the fundamental issues created for gold traders by Trump\u2019s new tariffs and its relationship with the USD. For a rounder view, we will conclude the report with a technical analysis of gold\u2019s daily chart.\u00a0\u00a0<\/p>\n\n\n\n

USD\u2019s negative correlation with gold\u2019s price remains inactive<\/strong><\/h2>\n\n\n\n

The movement of the USD index over the past five days remained in upward fashion, something that was also the case for gold\u2019s price, albeit gold continues to maintain clearer bullish tendencies than the USD for which bulls show some indecisiveness. <\/p>\n\n\n\n

Overall we continue to see the case for the negative correlation of the USD with gold\u2019s price to be inactive. Also US yields were on the rise since the 5th<\/sup> of February, yet seem to have failed to divert investments from gold, towards US bonds. Hence the above ascertainment forces to look for the fundamental reasons behind the ascent of gold\u2019s price elsewhere.\u00a0 \u00a0\u00a0\u00a0<\/p>\n\n\n\n

Trump\u2019s new 25% tariffs support gold prices<\/strong><\/h2>\n\n\n\n

Trump announced on Monday that he intends to impose 25% tariffs on all US steel and aluminium imports, \u201cwithout exceptions and exemptions\u201d, possibly by Wednesday. It should be noted that there are allready tariffs applied on US steel and aluminium imports of 10%, which are to be raised to 25%. The tariffs are expected to hit primarily US imports from Canada, Brazil, Mexico, South Korea which entered the US duty free until now. <\/p>\n\n\n\n

One exception may be Australian exports of steel and aluminium as the land down under claims to have a trade deficit with the US, an element that US President Trump seems to be taking account of. In any case, Trump\u2019s intentions to impose tariffs and his mercantile protectionist approach, combined by a wide degree of unpredictability and his flamboyant style, tends to enhance market uncertainty about the global economic outlook. <\/p>\n\n\n\n

Thus gold tends to be concentrating safe haven inflows as market participants try to weather the storm. The above realisation tends to enhance the role of safe haven investment if compared to the other two pillars in gold demand, namely physical consumer demand (especially in China and India), central bank gold buying, without that implying that demand for such activities has eased.\u00a0\u00a0<\/p>\n\n\n\n

January\u2019s US CPI rates and Fed Chairman Powell\u2019s testimony<\/strong><\/h2>\n\n\n\n

We note the disassociation of the paths of the USD and gold as trading instruments, yet we note two events at which the negative corelation of the two trading instruments could be re-established even briefly. The first would be in today\u2019s late American session, as Fed Chairman Powell delivers his first testimony before the US Congress. <\/p>\n\n\n\n

Should the Fed Chairman maintain a less dovish tone that what the market may be expecting, we may see the speech weighing on gold\u2019s price as the market may have to readjust its current expectations for the bank to deliver a rate cut in the June meeting. We also note the release of the US CPI rates for January on Wednesday\u2019s early American session, as another event that could affect gold\u2019s price. Should the release show an easing of inflationary pressures in the US economy, we may see gold\u2019s price getting some support.\u00a0 \u00a0\u00a0\u00a0\u00a0<\/p>\n\n\n\n

Gold Technical Analysis<\/strong><\/h2>\n\n\n\n

XAUUSD 4H Chart<\/strong><\/strong><\/h3>\n\n\n\n
\"XAU\/USD<\/figure>\n\n\n\n