- Gold recovers $ 90 this week while the US dollar weakens in the midst of growing commercial tensions and geopolitical risks.
- The president of the Fed, Daly, says that politics remains restrictive; The neutral rate can be increasing, resonating Powell’s hard line tone.
- The operators focus on the key US data next week: preliminary pmis, durable goods and the feeling of the final consumer.
Gold prices are ready to finish the week in a positive note, with an increase of more than 2.79% since precious metal enjoyed a $ 90 rebound in the US dollar due to the weakness of the latter, sponsored by uncertainty about global trade. At the time of writing, the XAU/USD quotes at $ 3,326.
Xau/USD remains at $ 3,326 after reaching a historical maximum of $ 3,358; Real returns increase, but taking benefits for the long weekend limits the rally
European and American markets are closed due to a long Easter weekend, so the news flow is light. The president of the Fed of San Francisco, Mary Daly, crossed the lines and said that the economy is in good situation, although some sectors are slowing down. He added that politics remains restrictive to a large extent, exerting the downward pressure on inflation, and added that neutral rates “may be increasing.”
Gold prices fell after reaching a historical maximum (AH) of $ 3,358 since operators took benefits due to the long weekend. The hard line discourse of the president of the FED, Jerome Powell, on Wednesday, limited the progress of the precious metal, although the uncertainty about US commercial policies and geopolitical risks can support gold prices.
The yields increased, with the 10 -year American treasure bonus yield, rising five basic points to 4,333%. The real US yields, which are calculated by subtracting inflation expectations of the nominal bonus, rose five BPS to 2,163%, an obstacle to gold prices.
Next week, the US economic agenda will be full of a series of Fed speakers, preliminary PMIS of S&P global, orders of lasting goods and the final reading of the feeling of the consumer of the University of Michigan.
XAU/USD Price forecast: Technical perspective
The Alcista del Oro trend remains intact despite Thursday setback below the 330 $ mark. As prices recover some above losses, the lack of down tracking suggests a limited acceptance of lower levels, keeping the door open for more profits.
In terms of Momentum, the relative force index (RSI) is still overbuilding, but not yet at the extreme level 80. However, a medium reversion movement could be on the horizon with the RSI revolving down.
In that case, the initial support is at $ 3,300, followed by the minimum of April 16 at $ 3,229. On the positive side, a rupture above $ 3,350 could prepare a maximum test of the year to date (YTD), with the following target at $ 3,400.
FAQS GOLD
Gold has played a fundamental role in the history of mankind, since it has been widely used as a deposit of value and a half of exchange. At present, apart from its brightness and use for jewelry, precious metal is considered an active refuge, which means that it is considered a good investment in turbulent times. Gold is also considered a coverage against inflation and depreciation of currencies, since it does not depend on any specific issuer or government.
Central banks are the greatest gold holders. In their objective of supporting their currencies in turbulent times, central banks tend to diversify their reserves and buy gold to improve the perception of strength of the economy and currency. High gold reserves can be a source of trust for the solvency of a country. Central banks added 1,136 tons of gold worth 70,000 million to their reservations in 2022, according to data from the World Gold Council. It is the largest annual purchase since there are records. The central banks of emerging economies such as China, India and Türkiye are rapidly increasing their gold reserves.
Gold has a reverse correlation with the US dollar and US Treasury bonds, which are the main reserve and shelter assets. When the dollar depreciates, the price of gold tends to rise, which allows investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rebound in the stock market tends to weaken the price of gold, while mass sales in higher risk markets tend to favor precious metal.
The price of gold can move due to a wide range of factors. Geopolitical instability or fear of a deep recession can cause the price of gold to rise rapidly due to its condition of active refuge. As an asset without yield, the price of gold tends to rise when interest rates lower, while the money increases to the yellow metal. Even so, most movements depend on how the US dollar (USD) behaves, since the asset is quoted in dollars (Xau/USD). A strong dollar tends to keep the price of gold controlled, while a weakest dollar probably thrusts gold prices.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
