- Gold price attracts fresh buyers following an intraday slide to the $2,772 area.
- Concerns over Trump’s new trade tariffs support the XAU/USD pair.
- Broad-based USD strength might cap the commodity ahead of the US ISM PMI.
Gold prices (XAU/USD) have recovered most of their earlier losses and are approaching the $2,800 mark during the first half of Monday’s European session. Gold, a safe-haven asset, remains close to the all-time high reached on Friday, mainly due to worries about the economic impact of President Donald Trump’s trade tariffs.
Trade war concerns are making investors risk-averse, which supports gold prices. Additionally, Trump’s policies may lead to higher inflation, enhancing Gold’s appeal as a hedge against rising prices. Thus, gold prices are likely to keep growing.
At the same time, the US dollar (USD) rose again, nearing a two-year high, because Trump decided to impose tariffs on Canada, Mexico, and China. There are also suggestions that the Federal Reserve might wait to cut interest rates this year due to rising prices and strong consumer spending, which could limit Gold’s price gains.
Gold price attracts dip-buyers amid trade war fears; sliding US bond yields.
The US Dollar (USD) rose sharply after President Donald Trump announced new tariffs: a 25% tax on imports from Canada and Mexico and a 10% tax on goods from China. This news negatively affected the price of Gold.
The US Commerce Department reported strong inflation at the end of 2024, with December consumer spending rising. Experts suggest the Federal Reserve may maintain its policies. The Personal Consumption Expenditures (PCE) Price Index rose to 2.6% year-on-year from 2.4%, while the core gauge stayed at 2.8%.
Investors are concerned that Trump’s tariffs could worsen US inflation and lead to a more aggressive Federal Reserve, hurting Gold prices. US Treasury Secretary Scott Bessent supports new tariffs starting at 2.5%, believing they will increase inflation and strengthen the US Dollar.
Trump’s demand for lower interest rates and the possibility of more Federal Reserve policy changes keep US Treasury bond yields low. This could prevent significant drops in commodity prices. Additionally, concerns that Trump’s tariffs might harm the global economy make investors cautious about risks with assets like Gold (XAU/USD).
EUR/USD holds sizeable losses near 1.0250 on Trump’s tariff war
On Monday, EUR/USD remained under heavy bearish pressure near 1.0250 in European trading. Following US President Donald Trump’s tariff announcements on imports from Canada, Mexico, and China, the US Dollar stood tall and weighed on the pair.
EUR/USD Technical Overview
The Relative Strength Index (RSI) on the 4-hour chart has moved slightly higher but remains below 30, indicating oversold conditions. Immediate support for EUR/USD is at 1.0200, 1.0160, and 1.0100, while resistances are at 1.0290-1.0300, 1.0350, and 1.0370.
The currency pair started the week under pressure, falling below 1.0250, its lowest since mid-January. Despite oversold conditions, investors may refrain from betting on a Euro recovery following President Trump’s tariff announcements of 25% on imports from Mexico and Canada and 10% on Chinese goods, with potential tariffs on European imports implied.
Francois Villeroy de Galhau from the European Central Bank said that tariffs might create economic uncertainty, possibly leading to more interest rate cuts. The upcoming US ISM Manufacturing PMI data could lower EUR/USD if investors choose safe-haven assets.
Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC, ETH, and XRP all crash hard
- Bitcoin price closes below its 50-day EMA at $98,611, poised for a further correction.
- Ethereum price fell below $2,500 on Monday, hinting at a down leg ahead.
- Ripple price closes below its ascending trendline, changing the market structure from bullish to bearish.
Bitcoin bears take the lead.
Bitcoin’s price fell on Friday, going below a critical support level. This drop was influenced by US President Trump’s announcement of tariffs on major trading partners like China, Canada, and Mexico, which added selling pressure to the entire crypto market.
On Monday, Bitcoin’s decline continued, reaching a low of $91,231 during the early Asian trading session. This fall led to many investors selling off their assets, resulting in over $2.26 billion in total liquidations, with more than $416 million specifically in Bitcoin, according to data from CoinGlass.
In an interview with FXStreet, Nick Forster, Founder of Derive.xyz, said recent Trump tariffs could raise inflation and reduce investor interest in crypto markets.
He noted that rising inflation may lead the Federal Reserve to keep or increase interest rates, which historically makes conditions worse for crypto assets. This could cause the digital asset market to shrink in the coming quarters.
Derive’s options market shows a 22% chance of Bitcoin (BTC) reaching $75,000 soon, with an 11% chance of it dropping below $65,000 by June 27 and a 25% chance it could fall below $80,000.
Data from Sentiment indicates that fewer investors are interested in buying the dip. Enthusiasm for big targets like $110,000 to $120,000 for Bitcoin is waning, suggesting some investors are stepping back from the market.
Ethereum price is poised for a correction as it dips below $2,500
Ethereum’s price faced a rejection around its descending trendline on Saturday and declined 13.87%, closing below its psychologically important $3,000 level the next day. At the time of writing on Monday, it continues to trade down by 13%, around $2,490.
If ETH continues its decline and closes below $2,359, it will extend the decline to test its next weekly support at $1,905.
The RSI on the daily chart reads 27, below its oversold levels of 30, indicating a strong bearish momentum. The MACD also continues to show a bearish crossover, suggesting the continuation of a bearish trend.
Conversely, if ETH finds support around the daily level of $2,359 and recovers, it could extend the recovery to test its $3,000 level.
Ripple price is set for a downward move as it closes below its ascending trendline.
On Sunday, Ripple’s price fell below its upward trendline, which has connected several lows since early January. It dropped 10.35% and closed under its 50-day EMA at $2.60. It remains down by 12.60% as of Monday, trading around $2.25.
If XRP keeps falling and closes below its daily support level at $1.96, it could drop further to test its weekly support at $1.40.
The RSI on the daily chart shows a reading of 30, which is at the oversold level, indicating strong negative momentum. The MACD also shows a bearish crossover, suggesting that the downward trend may continue.
Top altcoins Solana and Cardano crash amid fears of President Trump’s tariffs
- Cardano and Solana prices continue to trade in red on Monday after falling over 15% the previous week.
- Coinglass data shows that ADA and SOL liquidated $120 million in the last 24 hours.
- Technical outlook and on-chain metrics for both altcoins suggest a continuing bearish trend.
At the start of this week, more than $120 million was liquidated from ADA and SOL in just 24 hours. Both altcoins show signs of a continuing downward trend in their technical outlook and on-chain metrics.
Cardano and Solana traders face a massive wipeout of over $120 million.
The crypto market started to decline on Friday as Bitcoin fell below a critical support level. This decline continued over the weekend. By Sunday, altcoins like Cardano and Solana also dropped, falling nearly 16% last week and extending their losses into the new week.
On Monday, the drop in ADA and SOL caused over $120 million in liquidations, with more than $84 million in SOL alone, according to CoinGlass. This could create Fear, Uncertainty, and Doubt (FUD) among investors, leading to increased selling pressure and further price declines.
Solana Price Forecast: Bears aim for $120 mark
Last week, Solana’s price fell by 15.38% and dropped below the 50% price retracement level at $192.20. This level was based on the price range from the low of $155.11 on November 4 to the all-time high of $264.39 on November 22. On Monday, the price is still down by 6.34%, around $190.61.
If SOL keeps declining, it may reach a low of $168.88 from January 13. Closing below this level could lead to a further decline, testing the next weekly support at $120.91.
On the weekly chart, the RSI indicator shows a reading of 49, below the neutral level of 50, and trending down, suggesting bearish momentum. The MACD also indicates a bearish crossover, hinting at a downward trend.
Conclusion
Financial markets are experiencing increased volatility due to geopolitical tensions, particularly President Trump’s new tariffs. This pressure has impacted foreign exchange and crypto markets, with Gold gaining traction as a haven. Major cryptocurrencies like Bitcoin, Ethereum, and Ripple have seen steep declines, while altcoins such as Cardano and Solana are also struggling. Investors should closely monitor economic data and geopolitical developments for short-term market direction.
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