Yesterday, a phone call between former President Trump and the President of Mexico was reported as a ‘friendly conversation.’ This led the market to speculate that additional tariffs on Mexico might not be imposed. The idea that excessive tariffs may not be applied to other countries also spread, creating a risk-on mood in the market.
However, this did not lead to a drop in gold prices. Instead, gold rose. The buying momentum to fill the gap created by the sharp drop earlier this week was stronger.
Because it was Thanksgiving in the United States, there were fewer market participants, so the market reaction was limited.
Still, once market liquidity returns and the gap-filling buying ends, we expect that risk-on sentiment could lead to renewed selling in gold.
Forecasted Range for Gold (XAU/USD): 2650 – 2630
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