Safe-haven rush! Trump's tariffs combined with geopolitical risks, is gold nearing $4700?
2026-01-19 14:11:24
On Monday (January 19), spot gold fluctuated upwards during the Asian and European sessions, with an intraday increase of about 1.6%, and is currently trading around $4,670 per ounce. It had previously surged to $4,690.46 per ounce, setting a new historical high, mainly driven by the flow of global safe-haven funds.
US President Trump threatened to impose new tariffs on eight European countries that opposed his plan to acquire Greenland. The statement drew criticism from European officials and raised concerns about a broader transatlantic trade dispute. Coupled with already escalating geopolitical risks, this triggered a new wave of global safe-haven trading, prompting investors to seek refuge in traditional safe-haven commodities.
Meanwhile, concerns about the trade war triggered a crisis of confidence in US assets, causing the dollar to fluctuate and fall from a seven-week high of 99.49, with a daily decline of about 0.26%, which provided additional support for gold prices.
However, the market's reduced expectation of two further rate cuts by the Federal Reserve in 2026 has helped limit a larger decline in the dollar, while also putting headwinds on gold, a non-interest-bearing asset.
Nevertheless, the broader positive fundamentals suggest that the path of least resistance for gold remains upward, providing a basis for continuing the recently established uptrend.
US President Donald Trump announced last Saturday that he would impose an additional 10% tariff on goods from eight European countries starting February 1, until the US is authorized to acquire Greenland. Trump added that if no agreement is reached, the tariff rate will increase to 25% in June.
Major EU countries condemned the tariff threats surrounding Greenland as blackmail, and France proposed a series of previously unimplemented economic retaliatory measures. This reignited trade war fears, pushing the price of safe-haven gold to a record high on Monday.
Amid escalating tensions with the United States, Iran issued a new warning that any attack on Supreme Leader Ayatollah Khamenei could trigger a full-scale war. Meanwhile, the escalating conflict between Russia and Ukraine continues to pose geopolitical risks, further boosting the price of this safe-haven commodity.
Ukrainian Foreign Minister Andriy Sibikha stated that there is evidence that Russia is considering attacks on key facilities related to the nuclear power plant. President Zelensky added that Russia's potential attacks demonstrate its unwillingness to end the conflict.
Trump indicated he prefers to keep National Economic Council Director Kevin Hassett in his current position, meaning that Federal Reserve Chairman Jerome Powell will be replaced by someone else, forcing investors to reduce their bets on the Fed adopting a more aggressive easing policy.
However, despite the shift in market expectations regarding the likelihood of a Fed rate cut in 2026, the dollar failed to benefit and instead retreated after hitting a seven-week high, becoming another key factor driving gold's rise.
Furthermore, U.S. Commerce Secretary Rutnick stated last Friday that South Korean memory chip manufacturers could face tariffs of up to 100% if they do not commit to increasing investment in the United States. Rutnick said, "Every company wanting to do memory chip business in the United States has two options: either pay 100% tariffs or build in the United States. That's industrial policy." He did not mention any specific company names. Currently, Trump has not imposed tariffs on most foreign-made semiconductor products, instead instructing Rutnick and U.S. Trade Representative Greer to negotiate with trading partners to reduce U.S. dependence on chip imports. The White House indicated earlier last week that Trump might announce new tariff measures and corresponding compensation plans in the "near future" to incentivize domestic manufacturing.
Traders are currently awaiting Thursday's release of the U.S. Personal Consumption Expenditures Price Index and the final reading of third-quarter GDP for potential new trading momentum. However, the fundamental backdrop still appears to favor gold bulls, providing a basis for further price increases.
Gold has been rising along an upward channel since its lows at the end of October, indicating that the short-term upward trend has been firmly established.
The MACD indicator is above the zero line and has recently improved, indicating that bullish momentum is strengthening. The Relative Strength Index (RSI) has just entered overbought territory, putting pressure on gold prices near the resistance level of the ascending channel (around $4,700).
If gold prices encounter resistance at the upper channel line, market focus will shift to the support level of $4406.94, where the channel structure is expected to attract buying. If prices can continue to close above the $4700 resistance level, the upward trend is likely to continue; conversely, if a pullback occurs, gold prices will continue to consolidate within the channel, potentially delaying the start of a new trend.
(Spot gold daily chart, source: FX678)
At 14:08 Beijing time, spot gold was trading at $4668.28 per ounce.
US President Trump threatened to impose new tariffs on eight European countries that opposed his plan to acquire Greenland. The statement drew criticism from European officials and raised concerns about a broader transatlantic trade dispute. Coupled with already escalating geopolitical risks, this triggered a new wave of global safe-haven trading, prompting investors to seek refuge in traditional safe-haven commodities.
Meanwhile, concerns about the trade war triggered a crisis of confidence in US assets, causing the dollar to fluctuate and fall from a seven-week high of 99.49, with a daily decline of about 0.26%, which provided additional support for gold prices.
However, the market's reduced expectation of two further rate cuts by the Federal Reserve in 2026 has helped limit a larger decline in the dollar, while also putting headwinds on gold, a non-interest-bearing asset.
Nevertheless, the broader positive fundamentals suggest that the path of least resistance for gold remains upward, providing a basis for continuing the recently established uptrend.
Global safe-haven flows and a weaker dollar boosted gold prices.
US President Donald Trump announced last Saturday that he would impose an additional 10% tariff on goods from eight European countries starting February 1, until the US is authorized to acquire Greenland. Trump added that if no agreement is reached, the tariff rate will increase to 25% in June.
Major EU countries condemned the tariff threats surrounding Greenland as blackmail, and France proposed a series of previously unimplemented economic retaliatory measures. This reignited trade war fears, pushing the price of safe-haven gold to a record high on Monday.
Amid escalating tensions with the United States, Iran issued a new warning that any attack on Supreme Leader Ayatollah Khamenei could trigger a full-scale war. Meanwhile, the escalating conflict between Russia and Ukraine continues to pose geopolitical risks, further boosting the price of this safe-haven commodity.
Ukrainian Foreign Minister Andriy Sibikha stated that there is evidence that Russia is considering attacks on key facilities related to the nuclear power plant. President Zelensky added that Russia's potential attacks demonstrate its unwillingness to end the conflict.
Trump indicated he prefers to keep National Economic Council Director Kevin Hassett in his current position, meaning that Federal Reserve Chairman Jerome Powell will be replaced by someone else, forcing investors to reduce their bets on the Fed adopting a more aggressive easing policy.
However, despite the shift in market expectations regarding the likelihood of a Fed rate cut in 2026, the dollar failed to benefit and instead retreated after hitting a seven-week high, becoming another key factor driving gold's rise.
Furthermore, U.S. Commerce Secretary Rutnick stated last Friday that South Korean memory chip manufacturers could face tariffs of up to 100% if they do not commit to increasing investment in the United States. Rutnick said, "Every company wanting to do memory chip business in the United States has two options: either pay 100% tariffs or build in the United States. That's industrial policy." He did not mention any specific company names. Currently, Trump has not imposed tariffs on most foreign-made semiconductor products, instead instructing Rutnick and U.S. Trade Representative Greer to negotiate with trading partners to reduce U.S. dependence on chip imports. The White House indicated earlier last week that Trump might announce new tariff measures and corresponding compensation plans in the "near future" to incentivize domestic manufacturing.
Traders are currently awaiting Thursday's release of the U.S. Personal Consumption Expenditures Price Index and the final reading of third-quarter GDP for potential new trading momentum. However, the fundamental backdrop still appears to favor gold bulls, providing a basis for further price increases.
Gold needs to break through the trend channel resistance level for the bulls to maintain their short-term control.
Gold has been rising along an upward channel since its lows at the end of October, indicating that the short-term upward trend has been firmly established.
The MACD indicator is above the zero line and has recently improved, indicating that bullish momentum is strengthening. The Relative Strength Index (RSI) has just entered overbought territory, putting pressure on gold prices near the resistance level of the ascending channel (around $4,700).
If gold prices encounter resistance at the upper channel line, market focus will shift to the support level of $4406.94, where the channel structure is expected to attract buying. If prices can continue to close above the $4700 resistance level, the upward trend is likely to continue; conversely, if a pullback occurs, gold prices will continue to consolidate within the channel, potentially delaying the start of a new trend.
(Spot gold daily chart, source: FX678)
At 14:08 Beijing time, spot gold was trading at $4668.28 per ounce.
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