- The price of gold continues to attract safe refuge flows amid persistent uncertainties related to trade.
- Betting for an aggressive loosening of politics by the FED and a weaker USD also benefit the Xau/USD couple.
- Investors now expect the speech of the president of the FED, Jerome Powell, in search of a significant impulse.
The price of gold (Xau/USD) continues to reach new historical maximums during the Asian session on Wednesday and is now well within the distance of the round level of $ 3,300. Persistent concerns about the escalation of the commercial war between the US and China and the fears of recession in the US in the middle of the current tariff chaos continue to boost the demand of the precious metal of the sure shelter. In addition, the growing bets that the Federal Reserve (Fed) will soon resume its cycle of feature cuts and reduce financing costs four times this year they turn out to be another factor that drives flows to the non -generating yellow metal.
Meanwhile, the prospects for a more aggressive loosening of politics by the Fed fail to help the US dollar (USD) attract buyers or register some significant recovery from its lowest level since April 2022 reached last week. This, in turn, provides additional support for the price of gold, which seems to be quite indifferent to the slightly overcompricated conditions in the daily chart. Investors now expect the comments of the president of the FED, Jerome Powell, in search of clues about the future path of feat cuts. This will influence the short -term USD price dynamics and generate short -term opportunities around Xau/USD.
What moves the market today: gold price up
- The president of the USA, Donald Trump, took a 180 -degree turn last week and suddenly retreated in his high reciprocal tariffs on most US business partners for 90 days. In addition, Trump suggested that he could grant exemptions on car -related tariffs after removing smartphones, computers and some other electronic of high tariffs on China.
- However, Trump said the exemptions were only temporary and kept 145% tariffs on other Chinese imports. Trump also promised to reveal tariffs on imported semiconductors during the next week and also threatened to impose taxpayers on pharmaceutical products in the not too distant future, increasing uncertainty.
- China, on the other hand, increased its tariffs on US imports to 125% last Friday, feeding concerns that a commercial war of reprisals between the two largest economies in the world would weaken global growth. This continues to weigh in the feeling of investors and benefits the safe refuge assets, raising the price of gold to a new historical maximum on Wednesday.
- Meanwhile, Trump’s rapid changes in tariff announcements have eroded the faith of investors in US policies and weakened trust in the US economy. To this is added that the bets that the Federal Reserve (FED) will reduce financing costs at 100 basic points in 2025 sent the US dollar downward, reaching its lowest level since April 2022 last week.
- The most early published data showed that China’s economy grew 5.4% in the first quarter compared to the previous year, exceeding expectations. Other Chinese macroeconomic data – retail sales, industrial production and investment in fixed assets – also exceeded estimates, although they were overshadowed by the increase in commercial tensions with the US.
- Investors now expect comments from the president of the FED, Jerome Powell, to obtain more clues about the path of interest rates, which will play a key role in influencing the USD price dynamics. Apart from this, trade related developments should provide significant impulse to the Xau/USD torque, which seems to be prepared to prolong the upward trend.
The bullish trend of the price of gold remains uninterrupted despite the RSI overcompared in the short -term graphics
From a technical perspective, the relative force index (RSI) in the daily and 4 -hour graphics shows slightly overcompricated conditions and justifies a certain caution for upward operators. Therefore, it will be prudent to expect some short -term consolidation or a modest setback before positioning for any additional upward movement of the Gold.
Meanwhile, any corrective setback could now find some support near the 3,246-3,245 $ area before the minimum of the Asian session, around the 3,230-3.229 $ region. However, any additional drop could continue to be seen as a purchase opportunity and it is more likely to remain limited before the round level of $ 3,200.
Commercial War between the US and China Faqs
In general terms, “Trade War” is a commercial war, an economic conflict between two or more countries due to the extreme protectionism of one of the parties. It implies the creation of commercial barriers, such as tariffs, which are in counterbarreras, increasing import costs and, therefore, the cost of life.
An economic conflict between the United States (USA) and China began in early 2018, when President Donald Trump established commercial barriers against China, claiming unfair commercial practices and theft of intellectual property by the Asian giant. China took retaliation measures, imposing tariffs on multiple American products, such as cars and soybeans. The tensions climbed until the two countries signed the Phase one trade agreement between the US and China in January 2020. The agreement required structural reforms and other changes in China’s economic and commercial regime and intended to restore stability and confidence between the two nations. Coronavirus pandemia diverted the attention of the conflict. However, it is worth mentioning that President Joe Biden, who took office after Trump, kept the tariffs and even added some additional encumbrances.
Donald Trump’s return to the White House as the 47th US president has unleashed a new wave of tensions between the two countries. During the 2024 election campaign, Trump promised to impose 60% tariff particularly in investment, and directly feeding the inflation of the consumer price index.
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.
