- The price of gold bounces from the minimum of the Asian session while the USD slows its recovery from a minimum of several years.
- The weakening of investors’ trust in the US economy and the expectations of feat cuts of the Fed weigh on the dollar.
- The optimism for reducing tensions between the US and China continues to support the impulse of risk and limits the Xau/USD torque.
The price of gold (Xau/USD) attracted buyers in Asia on Wednesday, stopping its setback from the 3,500 $ peak reached the previous day. The recovery attempted from the US dollar (USD) from a minimum of several years was stopped in the midst of weakening the confidence in the US economy due to the contradictory ads of President Donald Trump. Apart from this, the prospects for a more aggressive relief of politics by the Federal Reserve (FED) cause some intra -diary sales of USD and turn out to be a key factor that helps rekindle the demand for yellow metal without performance.
Meanwhile, Trump administration officials hinted at a possible de -cast of the ongoing tariff dispute with China and fed optimism on a commercial agreement. In addition, Trump retreated in his threats to fire the president of the Federal Reserve (FED), Jerome Powell. In addition, Russian President Vladimir Putin indicated that he is open to the possibility of direct conversations with his Ukrainian counterpart Volodymyr Zelenskyy, which increases the hopes of a high fire and further encourages the appetite of investors for more risky assets. This is evident in a strong recovery in global shares markets, which, in turn, is braking operators to carry out new upward bets around the price of safe refuge gold.
What moves the market today: the bundles of the price of gold remain defensive amid the hopes of a commercial agreement between the US and China
- The US stock market rates rose abruptly on Tuesday after President Donald Trump went back to his criticisms of the president of the Federal Reserve, Jerome Powell, and said he has no intention of saying goodbye before his mandate expires in May 2026.
- In addition, the optimistic comments of the Trump administration officials about commercial conversations between the US and China further increased investor confidence and caused some collections of benefits around the price of gold refuge gold after the recent record streak.
- The US Treasury Secretary, Scott Besent, said the tariff war between the US and China will soon be broken down. Later, the White House spokeswoman, Karoline Leavitt, told journalists that the Trump administration is preparing the land for an agreement.
- Russian President Vladimir Putin said he has a positive attitude towards any peace initiative. In response, Ukrainian President Volodymyr Zelenskyy said Tuesday that we are ready to sit in any format after the high fire.
- Meanwhile, the rapid fluctuation of Trump’s position on commercial policies has eroded the confidence of investors and weakened confidence in the US economy. This does not help the US dollar to preserve the modest profits of the Asian session and support the Xau/USD couple.
- In addition, the markets have been valuing the possibility that the Federal Reserve resumes its cycle of rate cuts in June and reduces indebted costs at least three times by the end of this year, further benefiting the yellow metal without performance.
- Operators now expect the publication of preliminary global PMISs to obtain a new perspective on global economic health. This, together with trade -related developments, will influence the feeling of risk and provide a precious metal boost.
The price of gold could extend the corrective slip from the historical peak while below the 23.6% Fibonacci level
From a technical perspective, the precious metal seems to have found acceptance below the level of fibonacci setback of 23.6% of the last rise from the neighborhood of the $ 2,900, or the monthly minimum. This, together with the lack of additional intra -entrancy purchases, could be seen as initial signs of possible bullish exhaustion and supports the prospects of more losses. However, the oscillators in the daily graphic still remain comfortably in positive territory and justify caution before making aggressive bassists. Therefore, any subsequent sliding below the minimum of the Asian session, around the $ 3.315 area, will probably find a decent support and will remain limited near the level of 38.2% of Fibonacci, around the 3,289 $ region. That said, a convincing break below the latter should pave the way for a significant corrective fall in the short term.
On the other hand, the area of 3,370 $ (level of 23.6% of fibonacci) now seems to act as an immediate obstacle before the 3,400 $ brand. Some monitoring purchases have the potential to raise the price of gold to the horizontal resistance of 3,424-3.425 $, above which the bullies could make a new attempt to conquer the psychological brand of 3,500 $. A sustained force beyond the latter will establish the stage for an extension of the recent well -established bullish trend observed during the last four months.
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.
