Trump's Tariff Threat: A Warning to BRICS and Its Impact on Gold

Gold prices lost their shine on a strong US dollar, hitting a high of $2,666 on Friday but currently trading around $2,635.

Trump Warns BRICS Nations Against Dollar Alternatives

President-elect Donald Trump has warned BRICS nations that he will impose 100% tariffs if they try to create a currency that challenges the U.S. dollar's dominance. He demands these countries—Brazil, Russia, India, China, and South Africa—formally promise not to support any alternatives to the dollar.

This warning comes as BRICS discusses reducing reliance on the dollar and possibly creating a shared currency. Trump's remarks have increased concerns about trade tensions and potential retaliatory actions from BRICS countries. Analysts believe these tariffs may hurt the U.S. economy more than the targeted nations. This will increase demand for safe-haven assetslike Gold.

Fed's Inflation Challenge and Monetary Policy Outlook

Recent PCE data shows high inflation in the U.S., impacting the Federal Reserve's decisions. The Fed is considering raising interest rates to control inflation while maintaining stable employment. Financial markets are closely monitoring these developments for future actions.

Technical Outlook for Gold Prices

Technically, gold prices are currently below both short-term and long-term moving averages, indicating a bearish trend. Immediate support is at $2,600, with potential declines to $2,570, $2,536, and $2,500. Resistance is at $2,670; breaking this level could lead to prices rising toward $2,700, $2,720, and $2,750. A suggested strategy is to buy on dips between $2,600, with a stop-loss at $2,570 and a target price of $2,665