- The price of gold has reached a new historical maximum of $ 3,500, registering more than 10% return in April.
- The president of the USA, Trump, attacked against the president of the FED, Jerome Powell, on social networks, calling Powell a ‘loser’.
- The markets seem unstable due to the uncertainty of the profit season and the US political repression about the Fed.
The price of gold (Xau/USD) has reached another historical maximum in the first Asian operations on Tuesday, at $ 3,500. However, the price action is cooling a little towards the US negotiation session, and gold goes back to around $ 3,450 at the time of writing, due to some benefits shots at the psychological level. Several markets worldwide are returning to normal negotiation regimes after the Easter price action promoted by vacations, with Good Friday and Easter Monday seeing reduced negotiation volumes due to bank holidays.
This week’s rally is being promoted by the growing uncertainty and pressure on the independence of the Federal Reserve (Fed) and its president Jerome Powell. The president of the United States (USA) Donald Trump has been blaming the Fed and its president for the still high interest rates. Trump accused the president of the Fed, Powell, to lower the rates during the presidency of Joe Biden and said that he is looking for any means or possibility for the president to be replaced by someone chosen by Trump to quickly reduce the rates in the US.
What moves the market today: Game of guilt 2.0
- Trump’s call to the Fed to cut the interest rates immediately is seen by several operators and market participants as a threat to the independence of the Central Bank that took the US dollar to its lowest level since 2022 in the US dollar index (DXY), Bloomberg reports.
- Gold can be “the only real shelter that remains” as investors question US assets, including treasure bonds, according to Jefferies. “With the recent sale of US Treasury Bonds, and an opinion that Treasury bonds are inextricably linked to tariffs, a commercial war with China and the fiscal situation of the United States, we believe that gold is the only real active refuge that remains,” said Jefferies analysts in a note on Tuesday, reports Reuters.
- Before the quarterly profits, and based on fundamentals, Jefferies stood out as preferred selections to Endeavour Mining PLC among the seniors, already drew priceuses Inc. Among the non -seniors, Bloomberg reports.
Technical analysis of the price of gold: not so far
The precious metal is hot, perhaps overheated, after reaching a new historical maximum once again in April. As if the uncertainties of the commercial war and internal political disputes in the US were not enough to feed the gold rally, the fact that the US president is willing to fight with the Fed and is looking for ways of making its credible president be dismissed is probably the drop that fills the vessel for the markets.
Intradía R2 resistance at $ 3,494 has already been tested, and gold has reached a new historical maximum of $ 3,500 on Tuesday before correcting slightly down. This makes these levels a double resistance zone from now on. Yes Gold price It closes above the R1 resistance at $ 3,447 daily, more historical maximum and profits could occur for April.
At the bottom, the daily pivot point is at $ 3,395, although that seems gloomy without a close real technical support. On the other hand, the S1 support in $ 3,360, which coincides approximately with the maximum of April 17, is a more logical support to consider. In the event that this level is broken, look for S2 support at $ 3,296 and the maximum of April 11 in $ 3,245.
Xau/USD: Daily graphic
US interest rates
Financial institutions charge interest rates on loans to borrowers and pay them as interest to savers and depositors. They influence the basic types of interest, which are set by central banks based on the evolution of the economy. Normally, central banks have the mandate to guarantee the stability of prices, which in most cases means setting as an objective an underlying inflation rate around 2%.
If inflation falls below the objective, the Central Bank can cut the basic types of interest, in order to stimulate credit and boost the economy. If inflation increases substantially above 2%, the Central Bank usually rises the interest rates of basic loans to try to reduce inflation.
In general, higher interest rates contribute to reinforce the currency of a country, since they make it a more attractive place for world investors to park their money.
The highest interest rates influence the price of gold because they increase the opportunity cost of maintaining gold instead of investing in an asset that accrues interest or depositing effective in the bank.
If interest rates are high, the price of the US dollar (USD) usually rises and, as gold quotes in dollars, the price of low gold.
The federal funds rate is the type to a day that US banks lend each other. It is the official interest rate that the Federal Reserve usually sets at its FOMC meetings. It is set at a fork, for example 4.75%-5.00%, although the upper limit (in this case 5.00%) is the aforementioned figure.
Market expectations on the interest rate of the Federal Reserve funds are followed by the Fedwatch of the CME tool, which determines the behavior of many financial markets in the forecast of future monetary policy decisions of the Federal Reserve.
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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.
