Cassiar Gold Corp. (TSXV: GLDC, OTCQX: CGLCF)
Revitalizing the Cassiar Gold District in British Columbia, Canada
Gold prices rose above the key $2,700 per ounce resistance level before Friday’s (17 January) close, on the eve of Trump’s inauguration next Monday as uncertainty over the new administration’s tariff policy and renewed bets on further interest rate cuts supporting the precious metal, which is consolidating for the past two months.
Spot gold was down 0.4 per cent to $2,701.03 an ounce by the close, while the Nymex gold futures contract was down 0.1 per cent to $2,748.70. Still, gold prices accumulated a 0.5 per cent gain for the week, recording a third consecutive weekly gain.
On Wednesday, as the U.S. core inflation data was lower than expected, intensifying market speculation that the Federal Reserve will cut interest rates more than once this year.
Fed Governor Christopher Waller said that if the U.S. economic data further weakened, there is still the possibility of three to four rate cuts this year.
Ole Hansen, head of commodities strategy at Saxo Bank, said gold prices will meet strong resistance at $2,725 in the short term.
James Stanley, senior market strategist at Forex.com, believes that Trump is not going to be a president of austerity, so gold will not become less attractive to investors. However, investors should not chase gold at current levels and need to wait to see if the $2,700 support level can hold.
Analysts at ANZ said that with Trump in office, gold will highlight its attractiveness as a risk diversifier amid macro and geopolitical uncertainty.
Jesse Colombo, an independent precious metals analyst and founder of the BubbleBubble Report, noted that gold prices are likely to rise to all-time highs above $2,800 an ounce in the short term. He added that significant resistance for gold prices remains at $3,000 per ounce, which many analysts expect the precious metal to hit in the second half of this year.
According to analysts, it is not surprising that gold is doing well ahead of Trump’s inauguration. If Trump does start a trade war when he takes office, the global economy will be in trouble. Consumers around the world will face higher prices and weaker economic activity, creating a stagflationary environment, which is good for gold.
Carsten Fritsch, precious metals analyst at Commerzbank, said he expects gold prices could fall next week if the dollar rebounds from its current support level. Fritsch reminded investors that the previous appreciation of the dollar and a sharp rise in U.S. Treasury yields had not put pressure on gold prices, but this may not last unless expectations of central bank interest rate cuts increased further, the dollar weakened and bond yields fell further.
Spot silver prices fell 2 per cent to $30.17 an ounce on Friday, while palladium rose 1 per cent to $949.99 an ounce and platinum rose 0.9 per cent to $940.28 an ounce.
