- The price of gold falls abruptly about $ 3,300 while the US dollar runs strongly in general.
- The US dollar is firmly quoted before the deadline of US tariffs on July 9.
- Operators reduce moderate bets on the Fed after the best US NFP data for June.
The price of gold (XAG/USD) has dropped almost 0.8% to about $ 3,300 during the European trading session on Monday. The yellow metal faces a strong sales pressure since the feeling of the risky risk market has increased the demand for the safe refuge of the US dollar (USD).
Technically, a higher US dollar makes the price of gold a face face for investors. The US dollar index (DXY), which tracks the value of the dollar against six main currencies, reviews the weekly maximum around 97.45.
American dollar today
The lower table shows the percentage of US dollar change (USD) compared to the main coins today. US dollar was the strongest currency against the New Zealand dollar.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.49% | 0.42% | 0.93% | 0.53% | 0.98% | 1.08% | 0.50% | |
| EUR | -0.49% | -0.05% | 0.20% | 0.01% | 0.56% | 0.58% | 0.00% | |
| GBP | -0.42% | 0.05% | 0.24% | 0.09% | 0.62% | 0.64% | -0.07% | |
| JPY | -0.93% | -0.20% | -0.24% | -0.17% | 0.27% | 0.37% | -0.36% | |
| CAD | -0.53% | -0.01% | -0.09% | 0.17% | 0.47% | 0.55% | -0.16% | |
| Aud | -0.98% | -0.56% | -0.62% | -0.27% | -0.47% | 0.12% | -0.68% | |
| NZD | -1.08% | -0.58% | -0.64% | -0.37% | -0.55% | -0.12% | -0.70% | |
| CHF | -0.50% | -0.00% | 0.07% | 0.36% | 0.16% | 0.68% | 0.70% |
The heat map shows the percentage changes of the main currencies. The base currency is selected from the left column, while the contribution currency is selected in the upper row. For example, if you choose the US dollar of the left column and move along the horizontal line to the Japanese yen, the percentage change shown in the box will represent the USD (base)/JPY (quotation).
The market feeling becomes risky while investors expect holders related to the United States trade (USA) in the countdown to the deadline for reciprocal tariffs on July 9. Until now, Washington has signed trade agreements with the United Kingdom (UK) and Vietnam, and a limited pact with China, and has expressed confidence that it will soon reach agreements with more commercial partners.
Meanwhile, US president Donald Trump has announced that he will send letters to those nations with which an agreement has not been signed or discussed during the 30 -day tariff break, specifying tariff rates.
Theoretically, the demand for safe gold refuge should also have increased in the midst of global economic tensions. However, the price of gold quotes down since a strong decrease in the bets of the operators that support cuts of interest rates by the Federal Reserve (FED) at the Monetary Policy Meeting of this month has decreased its attraction. Operators reduce moderate bets on Fed due to optimistic non -agricultural payroll data (NFP) of the US for June.
An increase in interest rates by the Fed is negative for assets that do not generate performance, such as gold.
Technical Gold Analysis
The price of gold is listed near the ascending trend line of an ascending triangle formation in a daily frame, which is drawn from the minimum of April 7, 2,957 $. The horizontal resistance of the aforementioned graphic pattern is drawn from the maximum of April 22 around $ 3,500. Theoretically, a breakdown of the asset below the ascending trend line results in a strong fall.
The precious metal listed below the exponential (EMA) mobile average of 20 days around 3,334 $, which suggests that the short -term trend is uncertain.
The 14-day relative force (RSI) index oscillates within the range of 40.00-60.00, indicating a lateral trend.
Looking up, the price of gold would enter an unexplored territory after breaking decisively above the psychological level of $ 3,500. Potential resistances would be $ 3,550 and $ 3,600.
Alternatively, a downward movement of the gold price below the minimum of May 29, $ 3,245 would drag it towards the round level support of $ 3,200, followed by the minimum of May 15 in 3,121 $.
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.
