January 21, 2025 (Globalinvestorideas.com Breaking Stock Market News and Commentary) Market commentary from Tito Iakopa – Commercial Director at FlowCommunity.
The precious metal was volatile but remained near an 11-week peak as market participants evaluate the implications of Donald Trump’s potential second-term policies. The prospect of new trade barriers looms large, with the former president signaling intentions to implement 25% tariffs against Mexican and Canadian imports in the near future, although plans regarding Chinese tariffs remain undefined. This protectionist stance could potentially spark international trade tensions, bolstering gold’s appeal as a protective investment vehicle.
The financial markets are grappling with inflationary concerns stemming from Trump’s proposed fiscal agenda. His policies could fuel inflationary pressures, potentially creating challenges for the Federal Reserve’s monetary policy. Gold could come under pressure if the Federal Reserve turns more hawkish.
At the same time, recent diplomatic developments are introducing new variables into gold’s market dynamics. The implementation of the Israel-Hamas ceasefire has somewhat diminished immediate safe-haven demand. Similarly, a possible Russian-Ukrainian resolution under Trump’s leadership could further moderate gold’s appeal. Nevertheless, sustained central bank purchasing activity and persistent economic uncertainties continue to underpin the metal’s long-term prospects.
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