Gold rallies after Trump's tariff plans trigger uncertainty

• Gold price rallies over 0.50% on Tuesday as Trump enters his first day in office.
• President Trump said he will keep his tariff hike plans 
• Gold prints a new over two-month high at $2,732 and enters the area with $2,790 as firm resistance ahead.

Gold's price (XAU/USD) rallies for a second straight day this week after US President Donald Trump confirmed he intends to impose 25% tariffs on Canada and Mexico as early as February, as well as g tariffs on Silver and Gold. China was left out of the immediate levies being imposed, Bloomberg reported. 

The possibility of Trump applying tariffs on Silver and Gold has caused market uncertainty, driving premiums for futures to elevated levels.  President Trump's domestic agenda is the second main driver, which could extend Gold's bullish momentum further and increase demand for haven assets. Meanwhile, bond yields took a nosedive to 4.527% in Asian trading on Tuesday after remaining closed on Monday for Martin Luther King Day. 

Daily digest market movers: Dropping the ball already

• Comments by President Donald Trump during the signing session of his first executive orders caught traders by surprise. During the session, Trump said tariffs for Canada and Mexico will already be implemented as soon as February. The market reaction was a knee-jerk fall in the Canadian Dollar (CAD) and Mexican Peso (MXN) due to the unexpected decision, as the Wall Street Journal had already published a story on Monday where tariffs were postponed until a task force was formed first, Bloomberg reports.
• President Trump confirmed that universal tariffs on all imports to the US are under consideration as well and will come at a later stage, Reuters reports.
• Saudi Arabia's investment mining fund is set to buy a stake in Pakistan's Reko Diq project, which will be one of the world's largest Copper mines once complete, as the kingdom accelerates its expansion into the precious metal sector, the Financial Times reports.
• US yields are catching up with Monday's turn of events after remaining closed on that same day due to Martin Luther King Day. The US 10-year benchmark sank to 4.527% before rebounding at the start of the European session. The 10-year bond is still trading 5% lower from its peak performance last week at 4.788%  

Technical Analysis: Watch out for repercussions    

Gold's price edges higher for the second consecutive day on Tuesday and profits from US President Donald Trump's selective measures to single out Mexico and Canada and postpone China's levies. While tariffs are normally seen as a negative element for precious metals, in this case, the possibility of tariffs on Gold and Silver is ramping up prices. It looks like the Gold story is not worn out just yet. 

Profit-taking could emerge and push Gold's price back to $2,700, with the downward-slopping trendline of the broken pennant chart pattern last week at  $2,668 as the next support. In case more downside occurs, the 55-day Simple Moving Average (SMA) and the 100-day SMA converging at around $2,646 is the next level to watch. 

At the time of writing, $2,721, a sort of double top in November and December, is being tested. In case Bullion powers through that level, the all-time high of $2,790 is the key upside barrier. 

XAU/USD: Daily Chart