Tuesday Market Recap
Market uncertainty surrounding US President Trump’s potential tariff plans fueled safe-haven demand, driving gold prices up more than 1% past the $2,740 mark—the highest since November 6. Gold closed at $2,744.77 per ounce.
Meanwhile, crude oil prices plunged as Trump declared a national energy emergency and hinted at increasing US energy production, heightening fears of slowing economic growth and reduced fuel demand.
Gold Market Overview
Uncertainty over Trump’s tariff policies prompted a flight to safe-haven assets, pushing gold prices above $2,740 per ounce. By market close, gold gained 1.38%, settling at $2,744.77.
Key Factors Driving Gold
- Tariff Speculation: On his first day in office, Trump hinted at imposing 25% tariffs on imports from Mexico and Canada as early as February 1. This heightened market volatility and supported gold prices.
- Dollar Weakness: The Bloomberg Dollar Spot Index fell 1.1%, marking its steepest single-day decline in 14 months, as excessive bullish dollar positions unwound.
- Federal Reserve Watch: Investors are eyeing the upcoming Fed meeting and Personal Consumption Expenditures (PCE) inflation data for potential clues about the central bank’s rate policy.
Technical Outlook for Gold
Gold saw strong upward momentum, breaking past $2,740. After testing support at $2,716 during the US session, prices rallied to close above $2,740. The current bullish breakout suggests further upside potential.
Key Levels to Watch:
- Resistance: $2,755–$2,760
- Support: $2,730–$2,725
Crude Oil Market Overview
WTI crude oil futures tumbled 2.55%, closing at $75.89 per barrel after intraday losses of over 3.1%. Brent crude also declined, losing 1.07% to settle at $79.29 per barrel.
Key Factors Impacting Oil
- Energy Emergency Declaration: Trump’s announcement to increase US energy production and fill the Strategic Petroleum Reserve (SPR) weighed on oil prices.
- Trade Tensions: Uncertainty around tariffs and potential disruptions to Canadian and Mexican imports fueled bearish sentiment.
- Geopolitical Concerns: Trump hinted at halting oil imports from Venezuela, slightly limiting losses as markets assessed the impact on global supply.
Technical Outlook for Oil
Oil prices faced consistent pressure, breaking below $77. Support emerged near $75, where prices briefly stabilized. A retest of resistance near $77 could determine the next move.
Key Levels to Watch:
- Resistance: $77.0–$77.5
- Support: $74.5–$74.0
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Disclaimer
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