Gold gains as dollar slips on Trump tariff uncertainty 

Gold prices rose on Tuesday as the U.S. dollar eased due to uncertainty around President-elect Donald Trump’s tariff plans, with further support coming from top consumer China’s central bank adding to its gold reserves for a second straight month. “The main factor is the softening of the U.S. dollar over the last two sessions, which has provided some relief for the precious metal,” said Ricardo Evangelista, senior analyst at ActivTrades. The dollar index eased towards a one-week low versus major peers as traders considered whether President-elect Donald Trump’s tariffs would be less aggressive than promised following a report in the Washington Post. Trump however denied the report, deepening uncertainty about future U.S. trade policies. A stronger dollar makes bullion more expensive for other currency holders. Traders are setting their sights on Friday’s U.S. jobs report for Fed policy clues, along with job openings data due later in the day, ADP employment and the minutes from the Fed’s December meeting on Wednesday. Fed Governor Lisa Cook on Monday said that the Fed can be cautious about any further rate cuts given a solid economy and inflation proving stickier than previously expected. Bullion is considered a hedge against inflation, but high rates reduce the non-yielding asset’s appeal. Meanwhile, China’s gold reserves stood at 73.29 million fine troy ounces at the end of December as the central bank kept buying gold for a second straight month, official data showed. “By re-entering the market in December, Beijing signaled that its gold acquisition program remains active , a development likely to lend continued support to the precious metal’s price,” Evangelista added.

RBI’s Strategic Gold Accumulation

Czech law exempts long-term bitcoin holdings from capital gains tax 

The news follows the Czech government's approval of a capital gains tax exemption for long-term bitcoin holdings in early December. Last month, the Czech Republic passed a law that exempts bitcoin holdings of over three years from capital gains tax. This legislation, which was unanimously approved by the Czech parliament on Dec. 6, took effect on Jan. 1. 

Rupee hits record low of 85.84 vs $ 

The rupee fell to a lifetime low on Monday, weakening to 85.84 against the dollar and surpassing its previous low of 85.81 recorded in late Dec. It ended the day at 85.83 - down six paise from Friday's close of 85.77. A stronger dollar, tepid capital flows, and weak sentiment in the equity markets continued to weigh on the currency. Despite RBI intervention through dollar selling, the rupee has remained under pressure. Traders said that RBI appears to be holding the rupee until the new US administration's position on tariffs becomes clearer. 

Indian rupee can drop to 90-92 levels against dollar in next 6-10 months 

The renewed weakening of the Indian rupee to a fresh alltime low of 86 against the US dollar comes in the backdrop of a resurgent dollar index, which has risen by 8 percent over the past three months (from the end of September 2024). This development is significant as it impacts India's financial conditions, particularly in equities and bonds, which are now part of global indices. INR/USD has demonstrated remarkable currency inflexibility over the past two years enabled by aggressive usage of forex reserve management by the Reserve Bank of India (RBI), on both sides. Our currency inflexibility measure shows that while at 0.38, CNY is increasingly getting flexible, INR at 1 is mimicking a peg [0 represents a fully flexible currency and 1 represents currency peg].

China’s Central Bank Buys More Gold as Prices Trade Near Record 

China’s central bank expanded its gold reserves for a second month in December, signaling renewed appetite after temporarily pausing purchases last year as prices soared. Bullion held by the People’s Bank of China rose to 73.29 million fine troy ounces in December, from 72.96 million in the previous month, according to data released Tuesday. The central bank resumed adding to its gold reserves in November after a 6-month pause. The purchase shows the PBOC is still keen to diversify its reserves even with gold at historically expensive levels. The metal’s rally to a record in 2024 was supported by monetary easing in the US, safe-haven demand, and sustained buying by global central banks. Still, the rally cooled after Donald Trump’s US election victory buoyed the dollar. Earlier this week, Goldman Sachs Group Inc. pushed back a forecast for when gold was seen hitting $3,000 an ounce, citing the expectation of fewer rate cuts by the Fed in 2025.

openings data due later in the day, ADP employment and the minutes from the Fed’s December meeting on Wednesday. Fed Governor Lisa Cook on Monday said that the Fed can be cautious about any further rate cuts given a solid economy and inflation proving stickier than previously expected. Bullion is considered a hedge against inflation, but high rates reduce the non-yielding asset’s appeal. Meanwhile, China’s gold reserves stood at 73.29 million fine troy ounces at the end of December as the central bank kept buying gold for a second straight month, official data showed. “By re-entering the market in December, Beijing signaled that its gold acquisition program remains active , a development likely to lend continued support to the precious metal’s price,” Evangelista added. RBI’s Strategic Gold Accumulation 

Uzbekistan increases its gold reserves

In November 2024, the Central Bank of Uzbekistan purchased 9 tons of gold, expanding its gold reserves for the first time since July 2024, the World Gold Council told Trend. This brought the country’s total gold reserves to 382 tons by the end of the month. This move aligns with a global trend of central banks actively increasing their gold reserves. In November, net gold purchases by central banks worldwide amounted to 53 tons, continuing the trend observed throughout 2024. Notable buyers in November included the National Bank of Poland, which added 21 tons, as well as the Reserve Banks of India, Kazakhstan, and China, each purchasing 5 tons. Conversely, Singapore emerged as the largest seller, offloading 5 tons of gold. Meanwhile, Uzbekistan's gold reserves totaled $32.7 billion as of December 2024. Gold reserves decreased by 1.8 percent compared to the previous month ($33.3 billion in October 2024). 

Czech National Bank weighs bitcoin purchases for potential reserve asset diversification 

Czech National Bank weighs bitcoin purchases for potential reserve asset diversification Czech National Bank (ČNB) governor Aleš Michl discussed the possibility of bitcoin as part of the bank's reserve diversification strategy in an interview on Monday. Speaking with a local media company, Michl revealed that he had suggested the Czech central bank purchase bitcoin to diversify its asset holdings, but clarified that there are no plans to acquire any cryptocurrency. "Sure, I consider bitcoin, but there are seven of us on the board," Michl said, adding that discussions would continue. "Bitcoin BTC -1.47% is an interesting option for diversification against other assets." "I was thinking of acquiring just a few bitcoin, but I never intended to make a significant investment," Michl added. The Czech Republic is not the only country apparently considering cryptocurrency purchases. In September 2021, El Salvador became the first country to roll out an official bitcoin treasury program, though in the years following many politicians around the world including in the U.S. have outlined plans to buy bitcoin as a strategic investment. As the ČNB continues to explore diversification strategies, Michl said the bank is also focused on increasing its gold holdings. The bank plans to increase its gold reserves to approximately 5% of total assets by 2028, continuing the trend of adding more traditional assets to its portfolio.

Indonesia is admitted to the BRICS bloc of developing nations 

Indonesia has been admitted as a full member of the BRICS bloc of developing economies, the group's presiding country, Brazil, announced Monday. Indonesia’s candidacy was endorsed by BRICS leaders in August 2023, according to the foreign ministry of Brazil, which holds the group’s presidency for 2025. However, the world's fourth most populous nation opted to formally join the bloc only after the formation of its newly elected government last year. “The Brazilian government welcomes Indonesia’s entry into the BRICS,” the government said in a statement. “With the largest population and economy in Southeast Asia, Indonesia shares with other members a commitment to reforming global governance institutions and contributes positively to deepening South-South cooperation.” Indonesia’s Ministry of Foreign Affairs in a statement Tuesday said that it reflects Indonesia’s increasingly active role in global issues, and its commitment to strengthening multilateral cooperation.

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