- The price of gold is with new offer on Monday in the midst of optimism for the commercial agreement between the US and China.
- A fall in the consumption of gold from China and a modest rebound of the USD also weigh on the merchandise.
- Uncertainties related to commerce and Fed rate cuts of fees justify the caution for xau/USD bassists.
The price of gold (Xau/USD) attracts new sellers at the beginning of a new week and falls to the area of 3,268-3.267 $, re-approaching the minimum of Friday oscillation, during the Asian session. 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. Apart from this, a fall in the consumption of gold of China in the first quarter of 2025 turned out to be a key factor that decreases the demand for the traditional safe refuge ingot.
Meanwhile, the US dollar (USD) struggles to consolidate the strong recovery profits last week since a minimum of several years, marking its first weekly gain since March. Fed fees clippings and geopolitical risks in progress could cushion the price of gold. Therefore, it will be prudent to wait for a strong sale of continuation before positioning for any significant corrective fall from the historical maximum reached last Tuesday.
What moves the market today: the price of gold is pressed for the decrease in the demand for safe refuge; The loss seems cushioned
- China has exempted some US imports from its 125% tariffs taxes earlier this month in response to tariffs of 145% of the US about Chinese imports. This adds to the reaffirmation of US President Donald Trump that commercial conversations were ongoing with China and feeds the hopes of a rapid de -escalation of the commercial war between the two largest economies in the world.
- China has not yet confirmed any exemption and denies the ongoing tariff conversations. Meanwhile, Trump’s changing ads and global recession fears hold the demand for the price of gold as a safe refuge.
- The China Gold Association said Monday that the country’s gold consumption fell 5.96% year -on -year to 290,492 tons in the first quarter of 2025. In addition, high prices continued to limit the demand for gold jewelry, which collapsed 26.85% year -on -year to 134,531 tons. Meanwhile, the consumption of billets and gold coins increased by 29.81% to 138,018 tons.
- The US dollar preserves the recovery profits last week, although it lacks continuation in the midst of bets that the Federal Reserve will resume its cycle of feat cuts in June and will reduce the indebtedness costs at a complete percentage point in 2025. In addition, the geopolitical risk remains present in the middle of the prolonged war between Russia and Ukraine, which limits the losses for the precious metal.
- North Korea has confirmed for the first time that he has sent troops to fight in the conflict between Russia and Ukraine. Trump urged Russia on Sunday to stop his attacks in Ukraine, while the US Secretary of State, Marco Rubio, said that the US could leave peace efforts if he does not see progress. This, in turn, justifies a certain caution for the bassists of the Xau/USD.
- Investors this week will face the publication of key macroeconomic data from the US, including the Jolts employment offers report on Tuesday, US personal consumption expenses on Wednesday and the Non -Agricultural payroll report (NFP) on Friday. Data can provide more information about FED policy perspectives and give a significant impulse to merchandise.
Gold price bassists need to wait for a continuation sale below 3,265-3,260 $ before opening new positions
From a technical perspective, bass traders need to wait for acceptance below the 38.2% of the last upward leg from the neighborhood of the $ 2,900, or the minimum of monthly oscillation before opening new positions. Some continuation sales below the immediate support of 3,265-3.260 $ will confirm a break and make the price of gold vulnerable to extending its recent corrective fall from the psychological brand of $ 3,500, or the historical maximum. The subsequent fall could drag the precious metal to the 50%setback level, around the 3,225 $ region, on the way to the $ 3,200 mark. A convincing rupture below the latter will suggest that the merchandise has reached its maximum point in the short term.
On the contrary, an attempted recovery above the 3,300 $ brand could face some resistance near the Asian session, around the 3331-3.332 region. Any additional movement could still be seen as an opportunity for sale and remain limited near the supply zone of 3,366-3.368 $. The latter should act as a key point, which if it is exceeded 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 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.
