- The gold rebound takes up where he left it on Wednesday, after Thursday’s setback.
- The markets are excited by the next publication of the US non -agricultural payroll on Friday.
- Gold could reach a new historical maximum on Friday if non -agricultural payroll disappoint.
The price of gold (Xau/USD) is going up and quote about 2,867 $ at the time of Friday, after its small negative performance on Thursday. The rebound occurs before the US Non -Agricultural Payroll (NFP) report later in the day. A weaker number would benefit gold, with an increase in the probabilities of a rate cut by the Federal Reserve (Fed).
Meanwhile, headlines emerged on Friday that the Central Bank of China, the Popular Bank of China (PBOC), has expanded its gold reserves for the third consecutive month. Even at record prices, the Central Bank bought approximately 0.16 million Troy ounces in January, Bloomberg reports. Meanwhile, the threats of the US president, Donald Trump, to impose more tariffs on the Eurozone and other countries are maintaining gold supported as a safe refuge for investors in case the tariff war intensifies even more.
DIEST DIARY OF THE MARKET MOTORS: Risk of headlines on tariffs
- The gold reserves of the Popular Bank of China increased by 0.16 million Troy ounces last month, according to data published on Friday. The Central Bank resumed the addition of gold reserves in November after a six -month pause that ended a shopping streak of 18 months, reports Bloomberg.
- The commercial war between the US and China, the fears that President Donald Trump meets the threats of imposing tariffs on other nations and their possible unconventional geopolitical interventions are supporting the role of gold as a safe refuge in uncertain times. The bullish run seems to be ready to continue, with prices that probably reach $ 3,000 per ounce within three months, said Citigroup Inc. in a note, Bloomberg reports.
- Zimbabue’s gold production increased to 3,134.34 kg in January, compared to 2,375.32 kg a year earlier, said Fidelity Gold Refinery on Friday in a statement sent by email, Reuters reported. It was mainly the miners on a smaller scale that contributed to the increase in production, while the largest mines decreased in production.
- At 13:30 GMT, the US non -agricultural payroll report will be published for January. 170,000 new workers are expected in the month compared to 256,000 in December. However, general expectations are of a much lower number, according to several bank analysts and forecasts.
Technical Analysis: The 3,000 $ score as the Holy Grail
With the publication of non -agricultural payroll on Friday, it is clear that if gold reaches a new historical maximum, it will be due to a very weak number in employment data. However, as usual, this accumulation of expectations must be taken. Even an online number with consensus could be sufficient to disappoint markets in their downward expectations, triggering an instinctive reaction with gold facing some benefits before the weekend.
The pivot point level on Friday is the first close support at $ 2,854, followed by S1 support in $ 2,835. From there, the S2 support should reach $ 2,815. In case of a correction, the largest level of $ 2,790 (the previous maximum of October 31, 2024) should be able to catch any fall.
Upwards, resistance R1 reaches $ 2,874, just below the current historical maximum in 2,882 $. In the event that the rally can resume where he left it, the upward level to be exceeded in terms of daily pivot levels is the R2 resistance about 2,893 $ before 2,900 $ as a large figure.
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.
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.
