Gold prices drop over 1% due to strong US dollar and uncertainty around Trump's policies

From Investing.com: 2025-01-14 02:13:00

Gold prices fell by over 1% on Monday due to a strong US dollar following a robust jobs report. The move lower was also due to technical factors and the closure of long positions. Uncertainty around Trump’s policies is keeping XAU/USD under bullish pressure. Analysts are watching the US Producer Price Index report and Fed officials’ speeches for further clues on gold’s direction.

The euro briefly dropped below 1.01800 but recovered most of its losses due to bearish pressure from ECB-Fed policy divergence. A stronger US dollar and higher Treasury yields are crowding out financial flows, leading to problems in the eurozone. EUR/USD’s movement is influenced by a better-than-expected US NFP report, Trump’s policies, and ECB’s decision to cut interest rates.

The British pound continued to fall against the US dollar on Monday but recovered slightly. Concerns about fiscal sustainability and increased bond yields are putting pressure on GBP. The market is watching for UK inflation data, with CPI projected to increase by 2.6% annually. Higher borrowing costs could force the UK government to cut spending or increase taxes, hindering economic growth. GBP/USD is hovering above the 1.22000 support level, with the US PPI report expected to impact its direction.



Read more at Investing.com: Gold Struggles Amid Sell-Off, US Dollar Strength, and Trump Policy Uncertainity