The price of Gold has surged to $2,644, influenced by lower-than-expected U.S. factory orders data. After experiencing a rise at the start of the year, Gold prices faced pressure due to high U.S. bond yields and the potential tariff policies of President-elect Donald Trump. Meanwhile, EURUSD has remained strong at a high of 1.0436, affected by Trump’s proposed universal tariffs and positive PMI data from the Eurozone reflecting economic recovery. Market attention is now shifting to Eurozone inflation data, which is projected to remain steady at 2.7%, and its impact on ECB’s monetary policy.
GOLD
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As of Monday (January 7, 2025), the price of Gold (XAUUSD) rose to $2,644 following the release of U.S. factory orders data that fell below forecasts. Gold had initially rallied at the year’s outset as traders re-entered the market after reducing their positions leading up to the Christmas holidays.
However, Gold prices began to face downward pressure due to persistently high U.S. Treasury yields. This decline was also exacerbated by reports that President-elect Donald Trump is considering widespread tariffs on significant imports. This scenario continues to present potential price volatility, leaning bullishly towards Gold during the European session.
OIL
Oil prices remained stable during the morning trading session in Asia after being pressured by weak economic data. Factory orders from the U.S. for November were reported lower than expected, reflecting a decline in manufacturing demand. This situation may trigger concerns about an economic slowdown in the U.S.
Nevertheless, the potential for further declines seems limited due to increasing energy demands driven by colder weather, as well as stimulus measures being implemented by the Beijing government to support domestic economic activity.
EURUSD
EURUSD managed to hold near its daily high of 1.0436 established in the previous trading session. The ascent of this currency pair was supported by news that President-elect Donald Trump is evaluating universal tariffs solely on important imports.
The positive sentiment was further bolstered by the release of service PMI data for December, which indicated improvement in Spain, Italy, France, Germany, and the Eurozone as a whole, surpassing previous expectations.
Currently, the market is focusing on Eurozone inflation data, which is predicted to remain stable at 2.7% for the last month. This stability signals consistent price pressures in the region, which may reinforce market expectations regarding the European Central Bank’s (ECB) monetary policy stance.
GBPUSD
GBPUSD strengthened again during the Asian session, continuing its two-day rise from a two-week low. This uptrend was driven by a sell-off in the U.S. dollar following President-elect Donald Trump’s contemplation of universal tariffs solely on essential imports, which Trump later denied.
Nonetheless, the uncertainty surrounding these tariff policies could still create volatility in future markets. Traders will continue to monitor developments related to Trump’s trade strategy and its implications for global economic growth prospects and U.S. monetary policy. Should trade tensions persist or if tariffs are enforced more stringently, the U.S. dollar could regain support while GBPUSD might face downward pressure.
USDJPY
USDJPY continued its upward momentum in the morning trading session in Asia, with this trend likely to persist as the Japanese Yen remains under pressure due to diminishing expectations of interest rate hikes by the Bank of Japan (BoJ).
The widening yield spread between the U.S. and Japan, combined with a more optimistic market sentiment, supports the rise of USDJPY. However, concerns over potential market interventions by the BoJ and geopolitical risk factors could restrict USDJPY’s gains as a short-term safe haven asset.
NASDAQ
The Nasdaq maintained its upward trend during the Asian session, buoyed by a surge in semiconductor sector stocks after Foxconn reported record earnings for the fourth quarter. Foxconn’s fourth quarter revenue for 2024 reached T$2.13 trillion (approximately $64.72 billion), reflecting a 15.2% increase compared to the same period last year.
Shares of Nvidia, centered on artificial intelligence, also hit new highs, while the VanEck Semiconductor ETF (SMH) rose by over 3%.
Further positive catalysts emerged from a Washington Post report indicating that President-elect Trump’s tariff plans may be more limited than previously anticipated. However, Trump quickly refuted this report via a post on Truth Social, adding to the uncertainty regarding the direction of his tariff policies.
