Gold tumbles as Trump’s newest tariff threat boosts dollar

Gold futures fell Monday to start both the new week and month, pressured by a stronger dollar after President-elect Trump warned BRICS nations that he would require commitments that they would not move to create a new currency.

U.S. Interest Rates

Trump threatened 100% tariffs on the nine-nation bloc if it backed alternatives to the dollar, adding to fears that U.S. interest rates could remain higher for longer.

Gold

Trump’s latest tariff threat was a factor affecting most commodities in trading, leading some analysts to question their assumptions around gold continuing its rise in 2025.

“Gold’s post-election slide is somewhat surprising given it was billed as part of the ‘Trump trade’ in the run up to election,” Joe Maher of Capital Economics wrote. “Instead it has faltered following Trump’s win while most other Trump Trades have prospered.”

While Maher still sees an uptick in gold prices next year, he said the strength of the metal may not be as potent as once believed.

There are growing expectations that the U.S. Federal Reserve will skip a hoped-for interest rate cut in December, although safe-haven demand is keeping the downside for gold prices relatively protected, ANZ Research analysts said.

The Next Fed Meeting

The market’s short-term focus will be fixed on the next Fed meeting, set for mid-December, as well as key U.S. economic data this week including job openings and the non-farm payroll report, ANZ said.

About E. J. McKay

E.J.McKay is a Shanghai-headquartered investment bank with a special focus on mergers & acquisitions. We are one of the most long standing independent investment banks in China, with core business of mergers & acquisitions and financing advisory.