Gold price rises as trade war tensions remain elevated
- Gold gains as traders react to President Trump’s threat of new reciprocal tariffs, enhancing its safe-haven status.
- US Nonfarm Payrolls fall short of expectations, yet a declining Unemployment Rate suggests a resilient labor market.
- PBoC’s increased Gold reserves and cautious comments from Fed officials contribute to the metal’s price dynamics.
Gold prices rose again on Friday as the trade war between the US and China worsened, along with a mixed US employment report. The cost of Gold (XAU/USD) reached $2,862, rising 0.24%.
US President Donald Trump plans to announce new tariffs on many countries next week, boosting gold traders as prices rise. Tensions this weekend could drive more people to seek gold’s safe-haven value.
US data showed that Nonfarm Payrolls fell short of expectations in January, but the Unemployment Rate improved compared to estimates and December’s figures. This indicates that the job market is still strong, which may keep the Federal Reserve from cutting interest rates.
After the news, gold prices climbed to a high of $2,886 but later settled back down to previous levels. Reports also indicated that the People’s Bank of China (PBoC) started buying more Gold, increasing its reserves from 73.29 million to 73.65 million ounces.
Additionally, speakers from the Federal Reserve shared their thoughts. Minneapolis Fed President Kashkari said he sees the policy rate as “modestly lower.” Chicago Fed President Goolsbee mentioned that the job data was solid and hinted that rates would drop slower with more uncertainty ahead. Fed Governor Adriana Kugler noted that the inflation rate has remained steady, suggesting that it makes sense to keep the policy rate as it is.
Daily digest market movers: Gold price climbs alongside the US Dollar
- The US Dollar Index (DXY) increased 0.32% to 108.04 after hitting a daily low of 107.51.
- The US 10-year Treasury bond yield rises five basis points to 4.487%.
- US real yields, which correlate inversely to Bullion prices, climbed three basis points to 2.062%, a headwind for XAU/USD.
- US Nonfarm Payrolls in January dipped from 256K to 143K, missing the mark of 170K. The Unemployment Rate slid from 4.1% to 4%.
- Money market fed funds rate futures are pricing in 39 basis points of easing by the Federal Reserve in 2025.
XAU/USD technical outlook: Gold prices set to challenge $2,900
Gold’s trend is up, yet bulls have failed to clear the $2,900 figure. The Relative Strength Index (RSI) is overbought territory, while XAU/USD’s price action shows signs of exhaustion.
If Gold drops below $2,800, the next support would be the psychological $2,750 area, followed by the January 27 swing low of $2,730. Conversely, if the yellow metal rises above $2,900, the following key resistance would be the psychological $2,950, followed by $3,000.
US President Donald Trump: I will announce reciprocal tariffs next week on many countries
United States President Donald Trump hit social media hard on Friday, noting through several posts that his plans to execute widespread tariffs on most US trading allies are back on the table to address the US federal deficit. Without any changes to funding sources, the US’ budget shortfall is expected to swell under President Trump’s stewardship. His proposed tax cuts will cause the federal government’s inflows to evaporate.
President Trump also voiced his desire to “end the trade deficit with Japan,” which currently stands at $65 billion annually.
Bitcoin Weekly Forecast: BTC shows weakness, bears aiming for $90,000 mark
- Bitcoin price hovered around $97,000 on Friday after losing nearly 5% in the last three days.
- CryptoQuant weekly report shows that activity on the Bitcoin network has declined to its lowest level in a year.
- Traders should watch FTX’s upcoming repayments to creditors starting on February 18.
Bitcoin (BTC) ‘s price hovered around $97,000 on Friday after losing nearly 5% in the last three days. CryptoQuant’s weekly report shows that activity on the Bitcoin network has declined to its lowest level in a year. Traders should watch FTX’s upcoming repayments to creditors starting on February 18, which could bring volatility to Bitcoin prices.
Bitcoin crashes as Trump implements tariffs on imports from Canada, Mexico, and China.
Bitcoin’s price fell sharply at the start of this week, hitting a low of $91,231. This drop happened after US President Donald Trump announced tariffs on major trading partners, including China, Canada, and Mexico, which led to selling in the overall crypto market.
Later, Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau said they talked to Trump and agreed to pause the tariffs for 30 days to negotiate. Their agreement on security and trade cooperation positively changed the market’s mood, helping Bitcoin recover and close above $101,300 on Monday.
This price decline triggered over $1.72 billion in liquidations across the crypto market, with almost $373 million specifically in Bitcoin, according to CoinGlass.
Ben Zhou, CEO of Bybit exchange, stated on X on Monday that the actual total liquidations are much higher than $2 billion, estimating they should be around $8-10 billion. He explained that Bybit’s 24-hour liquidation amount alone was $2.1 billion, while Coinglass recorded only about $333 million. He mentioned that not all liquidations at Bybit were counted due to API limitations, which lowered the numbers.
Conclusion
This week’s market movements showed how geopolitical tensions and economic policies affect traditional and digital assets. Gold prices stayed strong amid trade war uncertainties and changes in central bank policies. Meanwhile, Bitcoin faced volatility due to tariff announcements and liquidity concerns. As investors navigate these uncertain times, upcoming policy decisions and economic data will continue to shape market sentiment. Traders should stay alert for possible changes in market trends in the coming weeks.
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