Gold was on the rise during the first full week of the new year, with futures ending above US$2,715 per ounce.
The yellow metal is seeing support from a variety of factors, including turmoil related to incoming US President Donald Trump. CNN reported on Wednesday (January 8) that Trump is considering declaring a national economic emergency in order to legally justify a wide-ranging set of tariffs on both ally and adversary countries.
Trump’s team hasn’t confirmed this plan, but it would allow him to build a tariff program via the International Economic Emergency Powers Act (IEEPA), which gives the president the ability to manage imports during a national emergency.
“I think the president has broad authority to impose tariffs for a variety of reasons, and there are a number of statutory bases to do so. IEEPA is certainly one of them” — Kelly Ann Shaw, Trump’s deputy assistant for international economic affairs
The lack of clarity on Trump’s tariffs has also boosted New York prices for both silver and copper futures. That’s creating opportunities for nimble traders who are able to take advantage of the disparity with London prices, but could result in squeeze scenarios — this is similar to what helped copper prices take off last year.
Gold also reacted this week to a weaker-than-expected private employment report out of the US. It shows that the economy added 122,000 jobs in the private sector in December, lower than the estimated rise of 140,000.
“(Weaker private payrolls data) is contributing to gold’s move, because ultimately, weaker employment numbers imply that the economy has been weaker than many had expected,” Bart Melek of TD Securities told Reuters.
However, the main data point investors were waiting for came on Friday (January 10), with the release of the latest US jobs report from the Bureau of Labor Statistics. It shows that nonfarm payrolls rose by 256,000 in December — that’s the most since March, and much higher than expected. Meanwhile, the unemployment rate fell to 4.1 percent,
The news has reinforced expectations that the US Federal Reserve will leave interest rates unchanged when it meets later this month. Its most recent dot plot shows officials expect only 50 basis points worth of cuts in 2025.
The news that the People’s Bank of China bought gold in December also helped gold this week. Although the central bank took a six month pause on purchases in 2024, it started adding gold to its reserves once again in November.
Bullet briefing — Trump sets sights on Greenland, Trudeau resigns
Trump sets sights on Greenland again
It wasn’t just tariff talk that placed Trump in the headlines this week. The president-elect is once again speaking about taking control of Greenland, an idea he first raised in 2019.
Trump’s latest remarks came as his son Donald Trump Jr. visited the island, which is an autonomous territory of Denmark. While Greenland and Denmark have repeatedly emphasized that Greenland is not up for grabs, Trump’s comments have already benefited at least one mining company working in the country.
Shares of ASX-listed Energy Transition Minerals (ASX:ETM) jumped this week, seemingly boosted by hopes that Trump could smooth the way for the company’s rare earths project.
Trudeau resigns, resource sector to benefit?
Canada was in the news this week as Prime Minister Justin Trudeau announced his resignation.
Parliamentary activities have been put on hold until March 24 as the Liberal Party seeks a new leader. A federal election is expected to follow quickly after that happens, with the Liberals likely falling from power.
Eric Nuttall of Ninepoint Partners, a popular Investing News Network guest, told BNN Bloomberg that Trudeau’s resignation is “fantastic” news for energy investors, adding that the prime minister couldn’t have been more antagonistic to the sector. In his view, a Conservative-led government will be favorable for the industry and stocks.
“Justin Trudeau’s economic policies over the past nine or 10 years have been a total failure, but specifically for energy, as Canada’s the third largest holder of oil reserves in the world, the fourth largest producer, it would be impossible to have asked for a more antagonistic prime minister” — Eric Nuttall, Ninepoint Partners
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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