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As global uncertainty rises with US tariffs, trade wars and future interest rate speculations, gold and silver have gained significantly since the start of 2025. With President Trump’s proposed tariffs on Mexico, Canada and China, this factor could reignite trade wars, creating uncertainty and increasing demand for precious metals. Rate cut expectations from the Federal Reserve could provide support for gold and silver.
Trump’s Tariffs
President Donald Trump’s recent tariff announcements have significantly influenced gold and silver markets. The proposed 25% tariffs on imports from Mexico and Canada, along with a 10% tariff on Chinese goods starting February 1, have heightened economic uncertainty. This uncertainty has driven traders and investors toward safe-haven assets, notably gold, pushing its price to October 2024 highs. ⁽¹⁾
The tariffs have also impacted the U.S. dollar, which weakened amid concerns over potential trade disruptions. A softer U.S. dollar typically makes gold more attractive, further supporting its price. The combination of tariffs and potential inflationary pressures could limit the Fed’s ability to cut interest rates, adding to the economic outlook. ⁽²⁾
The U.S. relies heavily on silver imports, particularly from Mexico. Imposing tariffs on Mexican goods could disrupt silver supply chains, potentially leading to price increases. Silver traders are closely monitoring these developments, as any significant changes in trade policies could have substantial effects on the metal’s availability and pricing. ⁽³⁾
Rate Cut Expectations Have Risen
Financial markets could expect the Fed to cut interest rates twice this year, potentially supporting the bullish momentum of precious metals. If this scenario unfolds, markets may also expect a weaker U.S. dollar and pressured U.S. Treasury Yields. ⁽⁴⁾
Markets suggest that easing inflationary pressures in the U.S. have raised the likelihood of monetary policy adjustments, making gold and silver both attractive hedges against potential economic uncertainty. ⁽⁵⁾
The Fed will meet on January 28-29 amid steady economic growth and falling inflation but is likely to face uncertainty from Trump’s proposed policies. Traders expect a 96% chance that the Fed will keep its interest rate unchanged, according to the CME Group’s FedWatch Tool. ⁽⁶⁾
Technical Analysis
Gold (XAUUSD)
Source: TradingView
Gold rebounded after being pulled back from its former high at $2,763 with some profit taking occurring around this level. Gold’s bullish momentum remains with all 3 EMAs supporting the price.
Bulls might look to monitor the $2,800 level as resistance and try to hold ground to keep the bullish trend active. If the trend reverses, bears might target $2,733 for a breach to confirm a reversal with the pivot point acting as support around $2,695.
Silver (XAGUSD)
Source: TradingView
Silver maintained an uptrend bi regaining ground after experiencing a slight price pullback, pressured by USD buyers.
The pivot point around $30.26 is crucial for maintaining potential bullish momentum. Bears may target the $29.55 zone, acting as possible support if price moves below the pivot point. Bulls may monitor the $31.00 area as resistance.
Sources: ⁽¹⁾ ⁽²⁾ ⁽³⁾ ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ Reuters
