In the first days of negotiations of this 2025, the market is experiencing an unexpected phenomenon for some analysts and investors, since although the dollar maintains the growing path that was projected, there is a which is unexpectedly increasing its price, becoming an attractive alternative.
All of this, according to experts, is a response to the pressures and geopolitical uncertainty that has been generated by the expectation of what will happen in countries like Venezuela or the United States, which are close to starting a new presidential term. as well as the effects of the wars in the Middle East and Ukraine, which do not stop.
Other news: Government warns that fiscal reality limits a further increase in the UPC
This is gold, a commodity that in recent days has reached prices of up to US$2,660 per ounce and has competed with other alternatives such as the US currency and the treasury bonds of that same country, which also mark a favorable performance for the investors.
However, Quasar Elizundia, market research strategist at Pepperstone, explained that although gold experienced a temporary rally of more than 1% yesterday, the pressure exerted by the strength of the dollar and the increase in Treasury bond yields limited its ability to maintain the earnings.
The list with the countries with the largest gold reserves.
iStock
“This behavior denoted the traditional inverse correlation between gold and the dollar, given that a strong dollar tends to make the acquisition of gold more expensive for investors who own other currencies,” he explained.
This expert added that the recent US economic data adds an additional layer of complexity, in which the increase in job openings, reflected in the Jolts (labor market) report that exceeded expectations with 8.1 million of vacancies and The acceleration in activity in the service sector demonstrates the strength of the US economy.
Also read: Industry, housing and energy, the most favored sectors of the Credit Pact
“However, the rebound in services sector prices, with a rate of 64.4%, the highest since January, raises concerns about persistent inflation. The resilience of the US labor market, while positive for the broader economy, introduces an element of uncertainty for gold as it reduces the likelihood of aggressive interest rate cuts by the Federal Reserve,” Elizundia said.
To better understand what’s going on, Pepperstone analyst indicated that this outlook is reinforced by the displacement of expectations of rate cuts by the Fed, now postponed until practically the second half of 2025, while a higher interest rate environment traditionally puts pressure on gold, as that the latter does not offer performance.
What was the price of the dollar on January 1, 2025?
iStock
“The postponement of rate cuts by the Fed directly impacts the attractiveness of gold as a safe haven asset,” he highlighted.
Gold resists
Despite these adverse factors, Quasar Elizundia was clear that gold has found some support in geopolitical uncertainty, particularly in relation to possible tariff policies.
More information: Portfolio, economic media with the greatest reputation in Colombia, according to the firm SCI Mago
“The statements about the imposition of tariffs on Canada, Mexico, China and even the Brics countries have added a risk component to the global economic outlook. In times of political and economic uncertainty, gold reemerges as a safe haven asset,” he stated.
That said, he noted that “in addition, the continued accumulation of gold by the Central Bank of China for the second consecutive month reinforces physical demand for the metal, offering additional support to prices.”
Investment
iStock
In this sense, he stated that market operators await with interest the publication of new employment data in the United States, including the crucial non-farm payrolls report, as well as the minutes of the Fed Central Committee, in search of clearer signals about the future direction of monetary policy.
“In this context, gold finds itself at a crossroads, navigating between dollar strength, inflationary pressures, expectations about Fed policy and growing geopolitical uncertainty. This complex The interaction of factors will continue to define the trajectory of the precious metal in the near future,” he concluded.
