Gold Stems Bessent Slump on Trump's 'Drugs and Migrants' Trade Tariffs
Tuesday, 11/26/2024 15:36
GOLD PRICES steadied above last night's 1-week lows in London trade Tuesday, stemming the precious metal's second 'Trump slump' since the White House election but remaining volatile as US stock markets extended yesterday's Bessent-at-the-Treasury gains despite Donald Trump declaring blanket trade tariffs on China, Mexico and Canada the day he re-takes office in January.
Bottoming overnight beneath $2606 per Troy ounce – down 6.6% from
Halloween's spot-market gold price record, and losing $110 from last weekend's finish – the price of gold then rallied to $2640 before giving back $20 of that rebound as New York's S&P500 index opening at a new all-time high above 6,000 points.
That still left gold bullion just ahead of the S&P price index for the year-to-date.
"The takeaway around [Scott] Bessent is he is the voice of reason, stands for phased in tariffs, lower deficits and lower inflation," said a note from Swiss bullion refiners and finance group MKS Pamp's metals strategist Nicky Shiels late Monday after
Trump named the hedge-fund manager as his pick for Treasury Secretary.
"Bessent's long career of navigating the twists and turns of markets has boosted confidence about incoming pro-business policies," said one UK stock-broker's analyst to CNBC, "and lifted hopes that any tariffs would be highly targeted and potentially less inflationary in nature."
But "On January 20th,
as one of my many first Executive Orders," the President-Elect then said on TruthSocial, "I will sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States...until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!"
Naming China as
the source of America's fentanyl's crisis, "We will [also] be charging China an additional 10% Tariff, above any additional Tariffs, on all of their many products," Trump added.
Gold for Eurozone investors rallied Tuesday but held below €2500 – a new record high only this time last month – with its steepest 2-day drop since August, down 3.8% from Friday morning's
new all-time Euro gold high of €2598 at the London Fix and losing €110 per Troy ounce from last weekend's spot market finish of €2608.
The
UK gold price in Pounds per ounce meantime fell 3.3% from the weekend's record spot-market close of £2167, down faster across 2 trading sessions than any time since March 2022 – the immediate aftermath of Russia's all-out invasion of Ukraine.
Russia and Ukraine today
continued to exchange drone attacks and ballistic missile strikes as the Kremlin's President Putin extended a signing-on bonus worth $3,800 for new army recruits.
Israel meantime carried out "extensive" air strikes across southern Lebanon while the Cabinet in Jerusalem voted on a 60-day ceasefire deal with Hezbollah.
"The Middle East will be a key over the coming week," says a gold-market update from analyst Rhona O'Connell at brokerage StoneX. "[But] gold dips are generally well-bid [and] tailwinds are still stronger than headwinds.
"We would expect buying into this correction. New highs certainly in the crosshairs – but not yet."
Like gold, the Dollar also steadied after dropping hard from Friday's peak – the highest DXY Dollar Index reading in over 2 years – while Washington's longer-term borrowing costs edged higher from Monday's drop to 4-week lows.
Silver prices also rallied with gold after hitting 7-session lows 1 cent beneath $30 per Troy ounce.
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