- The price of gold recovers positive traction as uncertainty about US tariffs continues to support refuge assets.
- The expectations of aggressive rates cuts by the Fed in 2025 keep the USD depressed and also benefit the Xau/USD torque.
- The temporal relief of Trump tariffs improves the feeling of global risk and could limit the raw material.
The price of gold (Xau/USD) attracts some buyers in the fall after the modest setback of the previous day from the historical maximum and quotes comfortably above the 3,200 $ brand during the Asian session on Tuesday. The rapid climbing of the commercial war between the US and China, the two largest economies in the world, keeps market participants in suspense. In addition, the uncertainty about the tariffs of US President Donald Trump and his impact on the global economy turn out to be key factors that continue to support the precious shelter.
Meanwhile, the US dollar (USD) struggles to register a significant recovery since its lowest level since April 2022 reached last Friday, since concerns about the possible economic repercussions of tariffs fell the fears of recession. In addition, the bets that the Federal Reserve (Fed) will soon resume its cycle of feat cuts keep the USD bundles on the defensive and provide additional support to the price of gold, which does not yield. However, the temporary relief of Trump tariffs continues to support market optimism and could limit the Xau/USD torque.
What moves the market today: the price of gold continues to attract safe refuge flows amid the growing commercial tensions between the US and China
- Concerns about the possible economic repercussions of the aggressive commercial policies of US President Donald Trump continue to support refuge assets. Meanwhile, China increased tariffs on US imports to 125% on Friday in retaliation for Trump’s decision to raise tariffs on Chinese products to 145% unprecedented. This maintains the price of gold near the historical peak achieved on Monday.
- The US still imports several difficult materials to replace China and events seem to have weakened confidence in the US economy. In addition, the growing concerns about a recession in the US, together with the bets that the Federal Reserve (FED) would soon resume its cycle of feature cuts and reduce indebted costs at least three times in 2025, fail to help the US dollar record a significant recovery.
- The governor of the Fed, Christopher Waller, said that the Trump administration tariffs represented a significant shock for the US economy that could force the US Central Bank to cut rates to avoid a recession. Separately, the president of the Fed of Atlanta, Raphael Bostic, said that we still have a path to travel in inflation, since tariffs could exert upward pressure on prices. The Fed cannot make bold movements in any direction, Bostic added.
- The feeling of global risk improved after the White House announced on Friday that smartphones, computers and other electronic would be temporarily exempt from Trump’s punitive tariffs. In addition, Trump said Monday that he was considering possible exemptions for the automotive industry of 25%tariffs, since companies need more time to make the transition to parts made in the US.
- However, Trump said the exemptions were temporary and added that he would reveal tariffs about imported semiconductors next week. Trump also threatened to impose tariffs on pharmaceutical products in the not too distant future. This continues to feed the uncertainty, which, together with the underlying bearish feeling around the USD, provides some support for the Xau/USD pair.
- The operators now wait for the US economic agenda on Tuesday, which includes the publication of the manufacturing index of the New York state. This, together with trade -related developments, could influence the USD and provide some impulse to the raw material. However, the approach remains in the speech of the president of the Fed, Jerome Powell, on Wednesday, which could offer clues on the future path of feature cuts and move to the yellow metal that does not yield.
Gold price bundles maintain control in the middle of a constructive technical configuration; The key support of 3,168-3.167 holds the key
From a technical perspective, the bullish resistance during the night below the 3,200 $ brand and the subsequent upward movement suggest that the recent bullish trend well established for the price of gold is still far from finishing. However, the daily relative force index (RSI) remains close to the territory of overblain and makes it prudent to expect a short -term consolidation or a modest setback before positioning itself for new profits. Therefore, any additional strength is more likely that in front of strong resistance near the area of 3,245-3.246, or the historical maximum reached on Monday.
On the other hand, the weakness below the round figure of $ 3,200 could still be seen as a purchase opportunity and it is more likely to remain cushioned near the region of 3,168-3.167. The latter should act as a solid base and a key point for short -term operators, which if it breaks decisively could pave the way for a deeper corrective fall. The price of gold could then fall to the intermediate support of $ 3,136 en route to the 315 $ region and the $ 3,100 mark.
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.
