- The price of gold moves down as the relaxation signs of commercial tensions between the US and China undermine the demand for safe refuge.
- The USD reverses part of the fall of the previous night and exerts additional pressure on the XAU/USD torque.
- Fed rate cuts bets could limit the USD and help contain the losses of the commodity in geopolitical risks.
The price of gold (Xau/USD) struggles to capitalize on the rebound from the previous day from the proximity of the key support of 3,265-3.260 $ and attracts new sellers during the Asian session on Tuesday. Despite the mixed signs of the US and China, investors remain optimistic about the possible unwinding of commercial tensions between the two largest economies in the world. In addition, the signs of progress in tariff negotiations add up to optimism, which, in turn, is perceived as a weight on precious metal.
Adding to this, the appearance of some purchases in the US dollar (USD) exerts some downward pressure on the price of gold. Meanwhile, investors remain alert to the high risk of a global recession due to uncertainty about the commercial policies of US President Donald Trump. This, together with persistent geopolitical tensions and the perspectives of a more aggressive relief of politics by the Federal Reserve (Fed), could contribute even more to limit the fall of the yellow metal that does not pay interest.
What moves the market today: the price of gold is pressed for the decrease in the demand for safe refuge and a modest rebound of the USD
- The recent movements of China to exempt certain US assets from their retaliation tariffs showed a willingness to display tensions between the two largest economies in the world. In addition, US Treasury Secretary Scott Besent said many of the main US business partners on Monday have made “very good” tariff proposals.
- The signs of commercial progress support the optimistic mood of the market. Meanwhile, the US dollar recovers traction and diverts flows from the price of safe refuge gold.
- However, investors remain alert to the mixed signals about the state of the negotiations between the US and China. In fact, US President Donald Trump said last week that commercial conversations with China were ongoing, although China has denied that tariff negotiations are being carried out.
- Meanwhile, traders expect the Federal Reserve to resume its cycle of feat cuts in June. In addition, the current market assessment indicates the possibility of at least three rates cuts by the end of this year. The lower indebtedness costs could help the yellow metal that does not pay interest to maintain an apartment in the short term.
- Russian President Vladimir Putin declared a unilateral fire of 72 hours in the Ukraine conflict from May 8, although the president of Ukraine, Volodymyr Zelensky, dismissed the three -day truce. In addition, the participation of North Korea in the war between Russia and Ukraine maintains the geopolitical risk at stake.
- Traders now expect the publication of US Jolts job offers data to get a new impulse later on Tuesday. Apart from this, US personal consumption expenses on Wednesday and the Non -Agricultural Payroll (NFP) report on Friday could provide a new perspective on the Fed policy.
Gold price bassists need to expect acceptance below 38.2% FIBO. and a break through the support of 3,265-3.260 $
The weakness below the area of ​​3,300-3,290 $, which represents the level of fibonacci recoil of 38.2% of the last rise from the proximity of the $ 2,900 or the monthly minimum, could continue to find a decent support near the horizontal zone of 3,265-3.260 $. A convincing rupture below the latter will be seen as a new trigger for the bearish traders and will prepare the stage for an extension of the recent setback from the historical maximum achieved last week. The subsequent fall could drag the price of gold to the 50%setback level, around the 3,225 $ region, en route to the 3200 $ mark.
On the other hand, the 3,348-3.353 region now seems to have emerged as an immediate obstacle. This is closely followed by the supply zone of 3,366-3.368, which if it is clear decisively should allow the price of gold to recover the $ 3,400 mark. The impulse could extend even more towards the intermediate obstacle of 3,425-3.427 before the bulls make a new attempt to conquer the psychological brand of 3,500 $.
FAQS tariffs
Although tariffs and taxes generate government income to finance public goods and services, they have several distinctions. Tariffs are paid in advance in the entrance port, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and companies, while tariffs are paid by importers.
There are two schools of thought among economists regarding the use of tariffs. While some argue that tariffs are necessary to protect national industries and address commercial imbalances, others see them as a harmful tool that could potentially increase long -term prices and bring to a harmful commercial war by promoting reciprocal tariffs.
During the election campaign for the presidential elections of November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy. In 2024, Mexico, China and Canada represented 42% of the total US imports in this period, Mexico stood out as the main exporter with 466.6 billion dollars, according to the US Census Office, therefore, Trump wants to focus on these three nations by imposing tariffs. It also plans to use the income generated through tariffs to reduce personal income taxes.
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.
