- The price of gold recovers initial losses and quotes above $ 3,300 on Friday.
- The commercial agreement between the US and the United Kingdom is to encourage markets, not a “complete and exhaustive” commercial agreement as President Trump announced.
- Gold sees safe refuge flows before the high -level meeting between China and the US during the weekend.
Gold (Xau/USD) rises just below 1% on Friday and is over $ 3,325 at the time of writing. The price of precious metal is rising as markets qualify the commercial agreement announced Thursday between the United States (USA) and the United Kingdom (United Kingdom) as a “nothing”. The commercial agreement between the US and the United Kingdom gives the US a better access to the market and a faster customs process for exports to Britain, but does not reach a “complete and exhaustive” agreement. At the same time, tariffs of 10% will be maintained and the United Kingdom will be forced to accept orders worth 10,000 million dollars with Boeing, Bloomberg reports.
The fact that this initial commercial agreement for the US is so badly conceived raises great questions and uncertainties just before the summit between China and the US that will be carried out in Switzerland during the weekend. In the prelude to that meeting, Chinese Minister of Commerce has once again expressed its demands that tariffs should be eliminated before commercial conversations may occur. Meanwhile, the US president, Donald Trump, hinted at night that people should leave and buy shares now, reports Reuters.
What moves the market today: that is not a commercial agreement at all
- President Trump also said during the night that he believed that the commercial conversations of this weekend with China would result in tangible progress. The president said he would consider reducing the 145% tariff that has imposed on many Chinese products if the discussions are going well. Beijing, on the other hand, reiterated his calls for the US to cancel unilateral tariffs on China, Bloomberg reports.
- People familiar with preparations for conversations, who are scheduled to start in Geneva on Saturday, led by the US Treasury Secretary, Scott Besent, and the Vice Prime Chinese Minister, He Lifeng, say that the US side has established as a goal of reducing tariffs below 60% as the first step they feel that China could be willing to match. The progress in two days of scheduled discussions could see those cuts implemented as soon as next week, they said, Bloomberg reports.
- “Buying gold in the falls is still fashionable, which so far limits the downward movements despite the fact that the demand for sure shelter has dried to some extent with the commercial agreement between the US and the United Kingdom,” said Tim Waterer, KCM Mercado Trade market, reports Reuters.
Technical analysis of the price of gold: everything will end in tears
The bets have risen for this weekend, after President Trump told people to go out and buy actions when talking about the commercial agreement between the US and the United Kingdom, since it would be the first of many. I am not sure if the suggestion was linked to the negotiations between the US and China this weekend, although Trump is clearly taking advantage of this event of an agreement as a springboard to generate impulse. However, questions about this should support the demand for safe refuge due to the growing uncertainty.
The first upward obstacle this Friday is at the daily pivot point at $ 3,336. If more follow -up appears later in the day, look for intra -resistance R1 at 3,384 $. The objective of R2 up -to -3,462 $ could be a bit far for today’s price action.
Downwards, S1 support at $ 3,258 is the first line of defense. The level of surveillance, which is about $ 3,245, is a much stronger floor from a technical point of view. In case it breaks under pressure, $ 3,210, which is the S2 support, should go into play.
Xau/USD: Daily graphic
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.
