Trump's policies shake up markets
The gold market (XAU/USD) is going through a tumultuous period, posting a second session of consecutive losses. This decline is fueled by the skyrocketing rise in American dollarraised to its highest level in four months. This dynamic follows Donald Trump's victory in the recent presidential elections in the United States, which reinforced market optimism.
Trump's return is accompanied by what analysts call ” Trump trades », reflecting renewed confidence in his promises of economic reforms, in particular an increase in customs tariffs and a significant reduction in taxes.
US bond yields weigh on gold
Precious metals, notably gold, are under increased pressure as US bond yields reach levels not seen since July. The yields on the 2- and 10-year bonds stand at 4.31% and 4.47%, respectively. This context reduces the attractiveness of non-remunerative assets such as gold, making the prospects more difficult for investors looking for safe havens.
Also read: Why has the price of gold lost more than 2% since the results of the American election?
The inflation outlook and the role of the Fed
The Trump administration plans to increase government spending and introduce protectionist measures. Such an approach could reignite inflation, prompting some investors to turn to assets like gold to protect against long-term risks.
However, this policy contrasts with the efforts of the Federal Reserve to control inflation. Markets are pricing in a 25 basis point reduction in interest rates, a move that could strengthen the appeal of gold by reducing the opportunity cost of non-earning assets.
Geopolitical tensions struggle to support gold
Despite the persistent uncertainty surrounding tensions in the Middle East, particularly between Iran and Israel, gold is failing to capitalize on its status as a safe haven. The market seems more focused on economic developments and the trajectory of US interest rates.
Technical indicators: a confirmed bearish bias
On a technical level, the price of gold evolves around $2,650 per ounceremaining below its 9- and 14-day exponential moving averages (EMAs). The 14-day relative strength index (RSI), below 50, confirms bearish sentiment.
Key support levels lie at 2 603,53 $representing a three-week low. If this threshold were to be crossed, gold could test the psychological floor of 2 500 $.
Resistance and opportunities
In the event of a rebound, the first major resistance is located at 2 700 $followed closely by the 9-day EMA at 2 711,40 $. Exceeding these thresholds could pave the way for a test of the historical record of 2 790,11 $reached at the end of October.
Faced with political and economic developments, gold remains a barometer of uncertainties. Investors are scrutinizing the Fed's next moves and the impacts of Trump's policies, as the yellow metal oscillates between downward pressure and rebound opportunities.
