AUSFOREX official website: Gaza ceasefire agreement reached! Trump is about to take office, and his policy uncertainty supports gold prices

On Monday (January 20, Beijing time), spot gold traded near the 2701.42, and this week Trump took office, his policy uncertainty and bets on further interest rate cuts reignited to support gold prices;AUSFOREX official websiteThe analysis said that U.S. crude oil was trading around $77.66 per barrel, and the latest U.S. sanctions on Russia's energy trade added to concerns about oil supply disruptions. However, the weekend Gaza ceasefire agreement was reached, which may limit the rise in oil prices.

The Dow Jones Industrial Average rose 0.78% to 43,487.83 on Friday; the S & P 500 rose 1.00% to 5,996.66; and the Nasdaq rose 1.51% to 19,630.20.

Focus on the day

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U.S. stocks rallied on Friday, capping off a strong week as investors were optimistic about a series of policy changes from the incoming Trump administration.

The S & P 500 and Dow Jones Industrial Average posted their biggest weekly percentage gains since early November, while the Nasdaq posted its best performance since early December. This week's data eased fears of a resurgence in inflation, while expectations grew that the Federal Reserve would cut interest rates earlier and further this year.

Construction of single-family homes in the US rose to a 10-month high, but demand is likely to be held back by rising mortgage rates and a glut of new homes, according to a Commerce Department report on Friday, which showed manufacturing output surged last month.

U.S. markets will be closed for the Martin Luther King holiday when President-elect Donald Trump takes office on Monday.

Uncertainty has weighed on stocks in recent weeks as policies such as Mr. Trump's tariffs threaten to reignite inflationary pressures and slow the pace of the Federal Reserve's interest rate cuts. However, a strong start to the corporate earnings season this week, with a number of big banks reporting results, also helped lift stocks, with the S & P 500 banking index rising 7.41 per cent last week.

Jim Baird, chief investment officer at Plante Moran Financial Advisors, said: "With strong economic growth, stronger corporate earnings, and a start to the year, you'll find a lot of questions around fiscal and monetary policy, and what Trump's agenda will look like, or what form it will take. Despite all of these issues, we're off to a much better start to the year than we've had in years past."

Benchmark U.S. 10-year Treasury yields rose 1.3 basis points to 4.619 percent, but retreated from a 14-month high of 4.809 percent set earlier this week.

Beth Hammack, chairperson of the Cleveland Fed, said inflation remains an issue and recent data suggest the economy is resilient. However, Federal Reserve Governor Paul Waller said last Thursday that the Fed may cut interest rates sooner and faster than expected because inflation is likely to continue to ease.

Data from the London Stock Exchange Group (LSEG) shows that the market generally expects the Federal Reserve to keep interest rates unchanged at its policy meeting later this month, and the market sees a more than 50% chance of cutting rates by at least 25 basis points before June.

Nine of the 11 sectors in the S & P 500 index rose, led by non-essential consumer goods, which rose 1.7%; health care and real estate fell.

Jin Shi

Gold prices were weighed down by a rising dollar on Friday, but still rallied on a weekly basis. Uncertainty over the policies of new U.S. President Donald Trump and renewed bets on further interest rate cuts sent gold prices above a key level of $2,700.

Spot gold fell 0.45% to $2,702.35 an ounce; U.S. futures fell 0.1% to $2748.70. "Today's pullback wasn't big, it was more of a profit-taking move, perhaps helped by a slightly higher dollar during the day, adding some slight pressure," said David Meger, head of metals trading at High Ridge Futures.

Gold hit a new high in more than a month last Thursday, $65.60 shy of its all-time high of $2,790.15 set in October. Last week, the price of gold rose 0.5%, its third consecutive weekly gain. Lower-than-expected core U.S. inflation data last Wednesday fueled speculation that the Federal Reserve has cut interest rates more than once.

Traders are expecting two rate cuts before the end of the year, and Federal Reserve Governor Paul Waller has hinted that more could follow if economic data weakens further.

Markets are currently eagerly anticipating Trump's inauguration on January 20, and his wide-ranging trade tariffs are expected to further stoke inflation and stoke trade tensions, potentially increasing gold's safe-haven appeal.

Spot silver fell 2% to $30.17 an ounce; palladium rose 1% to $949.99; and platinum rose 0.9% to $940.28.

Ajay Kedia, head of Mumbai-based Kedia Commodities, said last week's inflation data supported expectations of a rate cut, with a weaker dollar supporting gold.

Kedia said: "We see support at $2,694, and if it breaks through the $2,720 level, gold will move towards a high of $2,770."