Gold flat after Nvidia rout spilled over on Monday

• Gold faced some early selling pressure on Tuesday after Monday’s market rout. 
• The Nvidia correction supports President Trump’s call for a global tariff implementation. 
• Gold’s chances to print a fresh all-time high diminish. 

Gold’s price (XAU/USD) faces pressure for the second day in a row, trading at around $2,735 at the time of writing on Tuesday, following an over 1% dive the previous day after the Chinese AI startup DeepSeek shook up markets. The result is not tiny, with over $550 billion in market capitalization going up in smoke for Nvidia alone. Seeing the tech-sensitivity, cryptocurrencies such as Bitcoin also took it on the chin, with Bitcoin (BTC) losing over 6.5% at one point among one of the spillover victims in the financial markets asset classes. 

This plays into the hands of United States (US) President Donald Trump, who again demanded global tariffs. The belief is that doing so will better defend US tech companies and shield them from China’s dumping strategy. The rule of thumb remains that tariffs are inflationary, which means higher yields, which is a headwind for Bullion. 

Later this week, the Federal Reserve (Fed) and the European Central Bank (ECB) will decide on policy interest rates on Wednesday and Thursday, respectively. 

Daily digest market movers: Inflationary concerns

• Asian markets will quiet down this week and next week. With the Lunar New Year starting this Tuesday, Chinese traders will return to the markets on February 5. 
• The Financial Times reported that Treasury Secretary Scott Bessent is pushing for universal tariffs on US imports to start at 2.5% and rise gradually, citing unnamed sources. President Trump subsequently said that he wants across-the-board levies that are “much bigger” than that, Bloomberg reported. 
• The CME FedWatch tool projects no change in the policy rate for Wednesday's Federal Reserve interest rate decision. Going forward, the probability of a 25 basis point rate cut in the May rate decision is 40.0%, compared to 51.5% for no change. 
• Barrick Gold (ABX CN) and Mali will begin new negotiations on Tuesday. Barrick Gold and Mali will attempt to resolve a dispute over the alleged non-payment of taxes and the seizure of Barrick’s gold stocks by authorities in the country, Reuters reports. 

Technical Analysis: Where to go from here

Gold’s price rally takes a step back and might need to look for further support on the downside. Markets were blindsided by President Trump, who had already come in quite hard over the weekend with tariff threats for Colombia and now puts universal tariffs back on the table. Inflationary concerns triggered by these tariffs could mean higher yields, possibly no rate cuts in 2025 and thus headwinds for Gold. 

The first line of support remains at $2,721, a sort of double top in November and December broken on January 21. Just below that, $2,709 (October 23, 2024, low) is in focus as a second nearby support. In case both abovementioned levels snap, look for a dive back to $2,680 with a full-swing sell-off. 

Although the window of opportunity is starting to close, Gold could still hit the all-time high of $2,790, which is around 2% away from current levels. Once above that, a fresh all-time high will present itself. Meanwhile, some analysts and strategists have penciled in calls for $3,000, but $2,800 looks to be a good starting point as the next resistance on the upside. 

XAU/USD: Daily Chart