Gold prices surge 1.34% as investors flock to safe-haven assets amid trade war fears

From Investing.com: 2025-01-22 02:33:00

Gold prices surged 1.34% on Tuesday as investors sought safe-haven assets amid uncertainty over potential US trade tariffs. XAU/USD broke above $2,720, reaching a two-month high. Trump hinted at import duties on Canadian and Mexican goods, boosting gold demand. Analysts anticipate increased inflation due to Trump’s policies, prompting the Fed to maintain higher interest rates. XAU/USD is expected to range between $2,719 to $2,728 per ounce. Central bankers’ speeches at Davos may impact gold prices.

The euro rose 0.14% against the USD on Tuesday amid tariff uncertainty from the Trump administration. Eurozone trade relations with the US are crucial for the euro’s value. The euro is oversold, with large speculators holding record net-short contracts in euro futures. EUR/USD may rebound soon due to excessive short positions. Christine Lagarde’s speech at the World Economic Forum may influence EUR/USD towards 1.04580 or 1.03550 support level.

The Australian dollar dipped 0.05% against the USD on Tuesday amid volatile trade. AUD/USD initially fell towards 0.62000 but recovered later. Trump’s potential trade tariffs and RBA’s possible interest rate cut are weighing on AUD/USD. Traders anticipate a 78% chance of a 25-basis-point rate reduction at the February RBA meeting. Central bankers’ speeches at Davos could bring volatility to AUD, a risk-sensitive currency.



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