- Trump's harsh threats against BRICS countries regarding the exclusive use of the US dollar have contributed to a strong positive momentum for the US dollar, causing gold prices to decline to the support level of $2622 per ounce.
- This move abandoned the gains of the previous Friday's session, which reached the resistance level of $2666 per ounce.
- Concurrently, the gold price index is threatened with a return to the vicinity of the $2600 per ounce support level.
Trump's Trade Wars Boost the Strength of the US Dollar
According to reliable trading platforms, the US dollar index gained positive momentum from increased demand for the US dollar as a safe haven in response to new trade threats from Trump, who threatened to impose a 100% tariff on all BRICS countries if they implemented their recommendations for a unified currency among them, thus abandoning the US dollar. In addition to Trump's trade wars and the dollar's gains from these wars, the US dollar price will be affected by the announcement of US jobs figures at the end of the week and statements by several US Federal Reserve officials, which will determine the expectations for the future of the bank's upcoming decisions.
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Expectations from US Federal Reserve Decisions
Recently, and according to economic calendar data, data showed that progress in reducing US inflation has stalled, indicating a more gradual pace in the US interest rate cut cycle. Currently, financial markets indicate a 65% probability of a 25-basis point cut in US interest rates at the Federal Reserve's meeting in the last month of 2024, with only two more interest rate cuts fully priced for 2025.
Factors Affecting Gold Prices Momentarily
The most prominent factors affecting the gold market are the rise in the US dollar index at the beginning of this week to above 106.40, which is better than last week's losses. Moreover, the gains in the US dollar price came with the continued resilience of the US economy and the deterioration of the outlook for some of the world's economies recently. In addition to the strength of the dollar from Trump's trade threats, which in turn support a stronger US dollar. Additionally, the US dollar benefited from the decline in the euro price, which was affected by political uncertainty in France. At the same time, the US dollar rallied against the Japanese yen, as traders remained divided over the timing of the next interest rate hike by the Bank of Japan.
Another factor affecting the gold market is US Treasury yields. According to recent trades, the yield on 10-year US Treasury bonds has risen to more than 4.2%, reflecting a two-week decline, as investors bet on the strong economic performance of the United States before the end of 2025. Furthermore, the rise in bond yields also came in the wake of the rally in the US dollar after Trump threatened members of the BRICS group with a 100% tariff if they created or supported a new currency that could replace the dollar.
Gold Price Technical Analysis Today:
We still adhere to the latest gold recommendations with no risk. Technically, we still recommend buying gold from every downward level. According to today's gold analyst forecasts, the gold market will remain supported by increasing global geopolitical tensions and the levels of gold purchases by central banks for hedging, especially considering Trump's disruptive administration in the next four years. Currently, the most important support levels on the daily chart are $2600, $2578, and $2555 per ounce, with the need to avoid risk and activate take-profit technically, stop-loss orders to ensure the safety of the trading account from any sudden price fluctuations. Conversely, and over that time period, the resistance of $2700 per ounce will remain the most important for the bulls to dominate the trend again.
Regarding the performance of technical indicators, the Relative Strength Index (RSI) is neutral, and the MACD indicator is heading upwards.
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