On Monday, reports from US media suggesting Trump might implement broad tariffs on key imports caused the US Dollar Index to plunge sharply before recovering after Trump denied the claims. Gold prices experienced significant volatility, peaking near $2650 and dipping to a low of $2614.69 before settling at $2636.03 per ounce. Crude oil, which initially rallied over 1%, reversed gains to end lower, snapping a five-day winning streak.
Gold Market Overview
Gold prices fluctuated sharply on Monday following reports that Trump planned to impose universal tariffs on key imports, causing the US Dollar Index to plummet. However, Trump’s subsequent denial of the report led to a recovery in the dollar.
- High: $2650
- Low: $2614.69
- Close: $2636.03 (-0.12%)
Market Drivers
- Trump Tariff Rumors: The Washington Post reported that Trump’s aides were considering tariffs on key imports, which eased fears of broader trade restrictions. This news triggered a short-term selloff in the dollar, with the index falling over 90 points (-0.85%) at one point.
- Trump’s Denial: Trump refuted the report on social media, accusing the publication of spreading “fake news” and denying any reduction in tariff policies. This helped the US Dollar Index pare losses, ending the session at 108.24.
- Fed Commentary: Federal Reserve Governor Lisa Cook’s remarks also supported the dollar, as she cautioned against hasty rate cuts due to persistent inflation and a strong labor market.
Treasury Yields
- The 10-year US Treasury yield rose to a one-week high, up 2.44 basis points to 4.6219%, adding pressure on gold prices.
Upcoming Data
This week, markets await key US economic indicators, including the non-farm payrolls report and unemployment rate. Today’s highlights include November’s trade balance, JOLTs job openings, and remarks from Fed official Barkin.
Technical Analysis of Gold
Gold experienced significant intraday swings, trading in a broad range of $2614 to $2650.
- Asian & European Sessions: Prices climbed to $2647 before retreating to $2625.
- US Session: Gold spiked to $2649 but quickly reversed, testing support at $2614 before rebounding to close above $2630 with a long lower shadow.
- Outlook: The price action suggests continued consolidation within the $2614–$2650 range.
Today’s Focus & Strategy
- Strategy: Favor short positions during rebounds and long positions on pullbacks.
- Resistance: $2645–$2650
- Support: $2615–$2610
Crude Oil Market Overview
Crude oil prices reversed early gains on Monday as a recovering dollar and rising German inflation offset the support from cold weather.
- WTI February Futures: -$0.40 (-0.54%) to $73.56 per barrel.
- Brent March Futures: -$0.21 (-0.27%) to $76.30 per barrel.
Market Drivers
- German Inflation: German CPI rose to 2.9% in December (up from 2.4% in November), exceeding forecasts and supporting expectations for gradual ECB rate cuts, which tempered bullish sentiment in crude.
- Cold Weather: Persistent low temperatures in Europe and North America, along with rising natural gas prices, provided partial support for oil.
- Supply Signals: Saudi Aramco raised February oil prices for Asian buyers for the first time in three months, signaling optimism about regional demand.
Market Sentiment
The number of open interest contracts in NYMEX crude oil futures surged to 1.933 million last Friday, the highest since June 2023, reflecting growing interest in energy trading.
Technical Analysis of Crude Oil
Crude oil saw a “rally-and-reversal” pattern on Monday.
- Asian & European Sessions: Prices climbed past $74.6 but faced resistance at $74.9.
- US Session: Oil retreated sharply, breaking below $74 and closing near $73.3.
- Outlook: After five consecutive daily gains, crude appears to be consolidating near the 5-day moving average, indicating a potential short-term correction.
Today’s Focus & Strategy
- Strategy: Favor long positions on pullbacks, with short positions during rebounds.
- Resistance: $74.5–$75.0
- Support: $72.3–$71.8
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Disclaimer
This information contained in this blog is for general reference only and is not intended as investment advice, a recommendation, an offer, or an invitation to buy or sell any financial instruments. It does not consider any specific recipient’s investment objectives or financial situation. Past performance references are not reliable indicators of future performance. Doo Prime and its affiliates make no representations or warranties about the accuracy or completeness of this information and accept no liability for any losses or damages resulting from its use or from any investments made based on it.
The above strategies reflect only the analysts’ opinions and are for reference only. They should not be used or considered as the basis for any trading decisions or as an invitation to engage in any transaction. Doo Prime does not guarantee the accuracy or completeness of this report and assumes no responsibility for any losses resulting from the use of this report. Do not rely on this report to replace your independent judgment. The market is risky, and investments should be made with caution.
