- Gold remains firm while unemployment applications in the US exceed forecasts, reducing the chances of a rate cut in July.
- High yields of the treasure and a firm dollar keep the gold in a tight range.
- Trump hits Brazil with 50%tariffs, increasing uncertainty about the commercial war.
The price of gold (Xau/USD) remained firm during the American session on Thursday, since the US dollar remained solid after the publication of robust labor data, along with the uncertainty about the latest tariffs imposed by Washington. At the time of writing, the Xau/USD is traded above the figure of $ 3,300, practically unchanged.
The data revealed by the US Department of Labor showed that the number of Americans who requested unemployment benefits was lower than estimates and the previous figure, indicating a solid economy. Consequently, the optimism of market participants remains high, limiting the advance of the yellow metal, which is also pressed by the high yields of the US Treasury.
The expectations that the Federal Reserve (FED) cut the interest rates in July have decreased despite the fact that the latest Fed minutes showed that a couple of officials were looking for a reduction in indebtedness costs at that time. However, most Fed members seem worried about inflationary pressure and fear a price increase driven by tariffs.
Meanwhile, Daniel Pavilonis, Senior Market in Rjo Futures, commented that he does not see gold above $ 3,400, “unless there is an important geopolitical escalation.” He expects prices to stay in a negotiation range.
As for commercial news, the president of the USA, Donald Trump, gave his most significant blow on Wednesday, adding Brazil to the list, imposing a high tariff of 50% while saying: “Brazil, as an example, has not been good with us, it has not been good at all.”
Facing the week, merchants will be attentive to more Fed speakers on Thursday, in the midst of a scarce economic calendar.
Daily summary of market movements: the price of gold attached to $ 3,300 while the solid labor data of the United States exerts pressure
- The price of gold stabilized after the latest report of initial unemployment applications for the week that ended on July 5 revealed that 227,000 people requested benefits, below the forecasts of 235,000 and the previous reading of 232,000. Although the data suggest some strength in the labor market, continuous applications increased to its highest level in three and a half years, reaching 1.97 million in the previous week.
- Recently, the president of the Fed, Jerome Powell, said that in the current environment of low hiring and dismissals, any increase in layoffs could quickly boost the unemployment rate.
- The president of the Fed of St. Louis, Alberto Musalem, said that the economy is in a good place and that the labor market is in or near full employment. He added that inflation risks are upward due to tariffs, whose effect has not been seen, and a weakened US dollar could add inflation.
- The latest FOMC minutes revealed that some Fed officials do not anticipate a rate cut in 2025, although most see a cut as appropriate. The council members cited that the inflationary pressure remains high, along with the increasing inflation expectations and continuous economic resilience. All participants considered that the current policy rate is appropriate. The participants agreed that the risks of stagflation had decreased, although they remain high.
- On Wednesday, US President Donald Trump emphasized that it would apply 10% additional tariffs to countries that are aligned with BRICS anti -American policies.
- Another reason to stop the gold drop is that the Golden ETFs presented their largest entry, according to the World Gold Council. “The Golden ETFs recorded an entry of 38,000 million dollars in the first half of 2025, with their collective holdings by increasing by 397.1 metric tons of gold,” with entries that saw the largest jump since August 2022.
- The data of the Chicago Board of Commerce revealed that market participants are looking at 50 basic points (PBS) of relief in 2025.
Technical perspective of the Xau/USD: The price of gold remains stable about $ 3,300
The bullish trend of gold price is maintained, although buyers are struggling to boost the highest prices, since they are limited by simple mobile means (SMA) of 20 and 50 days about $ 3,345 and $ 3,319, respectively. The relative force index (RSI) is flat, oscillating at its neutral level, indicating that greater consolidation is coming.
Therefore, the first level of resistance for the XAU/USD would be $ 3,319. A rupture of this last will expose the 20 -day SMA at $ 3,345, then $ 3,350 and $ 3,400.
On the contrary, if the Xau/USD falls below $ 3,300, the first support would be the minimum of June 30, $ 3,246. Then, the single mobile average (SMA) of 100 days is $ 3,185, followed by the minimum of May 15, $ 3,120.
GOLD – FREQUENT QUESTIONS
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.
