- The price of gold rises to about $ 3,340 as the new Trump tariff threats increased the demand for shelter assets.
- The US president Trump imposes tariffs of 35% to Canada and prepares to announce additional taxes to the EU.
- Investors focus their attention on US inflation data for June.
The price of gold (Xau/USD) extends its profit streak for the third negotiation day on Friday. The yellow metal jumps to about $ 3,340 as the demand for shelter assets has increased after the threat of the president of the United States (USA), Donald Trump, to increase the general tax to “15% or 20%” from 10% announced in the so -called “Liberation Day” on April 2.
The new tariff threats of President Trump have shaken the demand for more risky assets worldwide. On Thursday, Trump said in a telephone interview with NBC News that he could announce tariffs of 15% or 20% to nations that have not closed an agreement during the 90 -day reciprocal tariff pause period.
“We are simply to say that all the remaining countries will pay, either 20% or 15%. We will solve it now,” Trump said.
On Thursday, Trump also announced 35% tariffs to Canada and declared that he will reveal additional taxes on imports from the European Union (EU) today or tomorrow.
Commercial tensions between the US and the EU are expected to interrupt global trade, considering the size of business between both economies.
From now on, the next important trigger for the price of gold will be the US Consumption Price Index (CPI) data for June, which will be published on Tuesday. Theoretically, gold exceeds performance in a high inflation environment.
Technical Gold Analysis
The price of gold is recovered near the exponential (EMA) mobile average of 20 days, which is negotiated around $ 3.330. The precious metal is maintained below the formal triangle formation in a daily temporal framework.
Theoretically, an asset break below the ascending trend line of the aforementioned graphic pattern, which is drawn from the minimum of April 7, 2,957 $, results in an abrupt fall. The horizontal resistance of the graphic formation is drawn from the maximum of April 22 around $ 3,500.
The 14-day relative force (RSI) index oscillates within the range of 40.00-60.00, indicating a lateral trend.
Looking down, the price of gold would fall towards the round level support of $ 3,200 and the minimum of May 15 in $ 3,121, if it breaks below the minimum of May 29, $ 3,245.
Alternatively, the price of gold will enter an unexplored territory if it breaks decisively above the psychological level of $ 3,500. Potential resistances would be $ 3,550 and $ 3,600.
Daily Gold Graph
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.
