Gold price before new turn from Donald Trump's policy

Experts optimistic in short term

Despite the steady rise in gold prices, some analysts say the precious metal still needs to work to break out of its two-month consolidation phase. They also believe that gold prices could face a challenge this week, following the inauguration of US President-elect Donald Trump (Monday, January 20 - local time).

Donald Trump’s bold statements about using tariffs to support American manufacturing continue to strengthen the dollar, but they also raise concerns about inflation and economic growth that could be hurt by a global trade war.

“In the short term, I see $2,725 as a key resistance level and it may be difficult to overcome until we get a clearer picture of Trump’s policies and their impact on the dollar, yields and confidence in upcoming rate cuts,” said Ole Hansen, head of commodity strategy at Saxo Bank. “I will be watching the tariff and spending news, as these are important factors for economic growth and the debt situation.”

While the new Donald Trump administration is creating geopolitical anxiety as the world waits to see what policies he will push in his first days in office, James Stanley, senior market strategist at Forex.com, said there is one thing Trump will definitely not do, which is good for gold.

“Trump is not going to control spending. He is not going to balance the budget. He is not going to be an austerity president,” Stanley said. “Gold is getting a lot of attention from investors because they expect to see currency dilution in global fiat currencies.”

Stanley said this is also the reason why Bitcoin has increased sharply over the past week, with the price surpassing $105,000 per token.

Jesse Colombo, an independent precious metals analyst and creator of the BubbleBubble report, said gold’s gains against other currencies are a sign of what investors should expect, and he sees the precious metal potentially hitting a record high above $2,800 an ounce in the short term.

Colombo noted that gold's major resistance level remains at $3,000 an ounce, with many experts predicting the precious metal could reach that target in the second half of this year.

“Gold has been resting for the past two months, but now the market is accumulating a lot of latent energy,” he said. “I am very excited about the potential of gold.”

"Don't buy at current prices"

While Stanley is bullish on gold in the short term, he cautions against chasing prices at current levels. Instead, he favors a strategy of buying on corrections and waiting to see if $2,700 can hold as support.

Gold’s performance against the US dollar has been impressive, but experts are also seeing gold’s overall strength in the global currency market. Over the past week, gold has hit new record highs against major currencies such as the euro, British pound, Chinese yuan, Canadian dollar and Australian dollar.

Despite the bullish sentiment prevailing in the precious metals market, some experts note that gold is trading at a key resistance point.

The last time gold hit this level, it fell 5% in just a few days, said David Morrison, senior analyst at Trade Nation.

“Last month’s sell-off occurred despite the fact that the daily technical indicators were neutral, with no indication of overbought conditions. The daily technical indicators are now higher than they were then, but they are showing a more positive trend as gold prices have gradually risen since the December lows,” Morrison said.

“The subsequent gold rally was driven by the Federal Reserve’s hawkish rate hikes. And prices have continued to rise since then, despite the apparent strength of the US dollar — a testament to the fact that correlations don’t always hold true.”