China resumes Gold buying as Trump warns of 100% tariffs

Gold prices are currently holding steady in wait-and-see mode as traders turn their attention to a series of high-impact macroeconomic events for clues on the precious metals next big move.

On Friday, the Non-Farm Payrolls report showed U.S employers added more jobs than expected in November with payrolls rising by 227,000 compared to estimates of 220,000.

According to analysts at GSC Commodity Intelligence – a stronger job market solidifies confidence that the Federal Reserve will continue to cut interest rates, with traders now pricing in an 85% chance of a rate cut at the final FOMC Monetary Policy Meeting this month.

A scenario which is unquestionably viewed as ultra-bullish for Gold.

As traders anticipate the Fed's next move, one of the biggest macro releases that traders will be watching out for will be U.S Consumer Price Inflation data. Policymakers will also get fresh data on retail sales – a crucial driver of the U.S economy – on the first day of this month’s two-day Monetary Policy Meeting.

Regardless of whether the data meets, beats, or misses expectations – the outcome is guaranteed to be a license to print money, which traders will not want to miss out on!

Looking beyond to the long-term, President-elect Donald Trump’s return to the White House in January 2025 with his fiery and chaotic brand of “America First” policies including higher tariffs, increased government spending, massive tax cuts and aggressive global trade wars – remains the most bullish catalysts for Gold prices ahead.

Last week, Donald Trump threatened BRICS+ nations with 100% tariffs if they moved away from the U.S dollar and started trading with their own reserve-type currency.

“The idea that the BRICS Countries are trying to move away from the Dollar while we stand by and watch is OVER," Trump wrote on social media.

“We require a commitment from these countries that they will neither create a new BRICS currency nor back any other currency to replace the mighty U.S dollar, or they will face 100% tariffs and should expect to say goodbye to selling into the wonderful U.S economy.”

Over the weekend, China has already hit back at Trump's threat with a statement signalling that the People's Bank of China (PBOC) has resumed buying Gold for its reserves after a six-month pause.

While China is unlikely to admit it – traders are convinced that resumption of purchases by the PBOC is a tactical move to diversify away from the greenback and prevent the U.S using the dollar as a political weapon.

Data compiled by GSC Commodity Intelligence – shows the PBOC was the world's largest official buyer of Gold in 2023 – playing a pivotal role on launching the precious metal on a bull run that has seen prices score back-to-back all-time record highs – not once, not twice, but on 39 separate occasions, so far this year.

The potential for higher inflation, tax cuts and larger budget deficits alongside concerns over U.S dollar weaponization could ultimately send Gold prices a lot higher from current levels in the coming months and years ahead.

Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions:

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