- The price of gold attracts some sellers as a modest strength of the USD causes some benefits.
- Fed rates cut expectations should limit US recovery and support yellow metal without performance.
- Commercial restlessness and increased geopolitical tensions could further limit losses for Xau/USD.
The price of gold (Xau/USD) is with a new offer during the Asian session on Friday and slides towards the 3,030 $ area in the last hour, approaching again to the minimum oscillation last night. The US dollar (USD) is quoted with a positive bias for the third consecutive day and leads the bulls to lighten their bets around the merchandise for the weekend. That said, a combination of factors could continue to offer some support to the ingot, which remains on the way to register profits for the third consecutive week.
Investors are still concerned about the aggressive policies of US President Donald Trump and his impact on the global economy. Apart from this, the persistent geopolitical risks derived from conflicts in the Middle East and the prolonged war between Russia and Ukraine should continue to act as a tail wind for the price of safe refuge gold. In addition, bets that the Federal Reserve (FED) will resume its cycle of fees of fees should limit the use of the USD and contribute to limit the losses of the yellow metal without performance.
What moves the market today: the price of gold is pressed by the modest strength of the USD; The downward potential seems limited
- The US dollar attracts some buyers for the third consecutive day and seeks to consolidate the rebound this week from a minimum of several months, exercising some downward pressure on the price of gold during Friday’s Asian session.
- Investors are still concerned about the threats of reciprocal tariffs of US President Donald Trump, who said they will enter into force on April 2. This adds to a 25% tariff on steel and aluminum since February.
- Both Russia and Ukraine intensified air attacks on Thursday in the midst of truce conversations, with Ukraine attacking the Engels of Russia Air Base in the Saratov region with attack drones, causing a fire and explosions in the area.
- In addition, the Ukraine Air Force said Thursday that Russia had launched 171 drones about its territory. Meanwhile, Russian and American officials are scheduled to hold Ukraine conversations in Saudi Arabia on Monday.
- Israel resumed heavy attacks in Gaza on Tuesday, breaking the high fire with Hamas that was in force since the end of January. In addition, Hamas shot three rockets towards Israel on Thursday, without causing victims.
- The Federal Reserve indicated that it will deliver two rate cuts of 25 basic points by the end of this year and also reviewed its growth perspective in the midst of uncertainty about the impact of Trump’s aggressive commercial policies.
- In addition to this, the president of the FED, Jerome Powell, said that tariffs will probably affect economic growth. Investors now see the US Central Bank by reducing indebtedness costs in the monetary policy meetings of June, July and October.
- The perspectives of a greater relief of politics by the Fed could stop the USD’s bulls to perform aggressive bets and act as a tail wind for the yellow metal without performance in the absence of any relevant macroeconomic publication of the United States.
The price of gold will probably attract buyers in the falls at lower levels and find a decent support near the psychological level of $ 3,000
From a technical perspective, the corrective fall observed in the last two days could be attributed to some benefits in the midst of slightly overcompricated conditions in the daily chart. That said, the lack of continuation sales justifies some caution for the bearish operators and before confirming that the price of gold has reached its maximum short -term point. Therefore, any new fall below the area of ​​3,023-3.022 could still be seen as a purchase opportunity and remain limited near the psychological level of $ 3,000.
The latter should act as a key point for short-term operators, which if it is broken decisively could cause some technical sales and drag the price of gold towards the intermediate support of 2,980-2.978 $ en route to the area of ​​2,956 $. The downward trajectory could extend even more towards the support of $ 2,930 before the XAU/USD falls to the level of $ 2,900 and aim to test the minimum oscillation last week, around the region of 2,880 $.
On the contrary, the 3,057-3,058 $ area, or the historical maximum achieved on Thursday, now seems to act as an immediate obstacle. A sustained strength beyond this level will be seen as a new trigger for upward operators and will pave the way for an extension of the recent well -established upward trend observed in the last three months approximately.
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.
