- The price of gold moves downward in the first Asian session on Friday, pressed for the benefits.
- The growing uncertainty about tariffs and fears of recession could boost safe refuge flows, supporting the price of gold.
- The president of the Fed, Daly, is scheduled to talk later on Friday.
The price of gold (Xau/USD) remains stable on Friday after retreating a historical maximum of $ 3,358 while investors take benefits for a long Easter weekend. The significant uncertainty about the tariffs of US President Donald Trump about imports to the US and the ongoing geopolitical tensions could support the price of gold, known as an active refuge.
On the other hand, the president of the Federal Reserve (Fed), Jerome Powell, adopted a tougher position, reducing the probability of a reduction of Fed rates in June. This, in turn, could raise the dollar and weigh on the price of the raw material called in USD. Powell said that a weak economy and high inflation could conflict with the objectives of the Fed and make a stanner scenario possible. Mary Daly of the Federal Reserve (FED) is scheduled to speak later on Friday. The volume of operations is expected to be light on Good Friday.
The price of gold slides down on Good Friday
- “Gold is still strongly backed by a weaker dollar, uncertainty about tariff ads and fears about a global recession,” said Lukman Otunuga, senior investigation analyst in the FXTM online trading corridor.
- Initial unemployment applications in the US for the week that ended on April 12 fell to 215K, according to the US Department of Labor (DOL) on Thursday. This figure was lower than the initial estimates and was lower than the previous week of 224K (223K).
- Continuous unemployment applications for the week that ended on April 5 increased by 41K to 1,885m compared to 1,844m (revised of 1.85m).
- Construction permits in the US increased 1.6% to 1,482 million in March, exceeding 1.45 million estimates. Meanwhile, the beginnings of housing fell to 1,324m in March from 1,494m in February (reviewed of 1,501m).
- The monetary market operators have incorporated almost 86 basic points of FED fees cuts by the end of 2025, with the first expected cut in July, according to the CME Fedwatch tool.
Gold price bias persists, the overcompared RSI justifies caution for the bulls
The price of gold is quoted in a flat tone in the day. The precious metal maintains the bullish vibrate in the daily time frame, characterized by the price remaining above the 100 -day exponential mobile average. However, the 14 -day relative force index (RSI) moves above the 70.00 mark, indicating overcompra conditions and justifying some caution. This suggests that greater consolidation or temporary sale is on the horizon.
On the positive side, the immediate resistance level to be monitored is $ 3,355, the upper limit of the Bollinger band. A sustained trade above the mentioned level could pave the path to the psychological level of $ 3,400.
In the bearish case, the minimum of April 18 in $ 3,230 acts as an initial support level for the Xau/USD. Below, the next containment level is observed at $ 3.105, the minimum of April 2.
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.
