- Gold extends its profits on Tuesday, driven by the general weakness of the US dollar and the demand for safe refuge.
- The moody’s reduction of US sovereign debt and renewed tax concerns continue to support precious metal prices.
- The Xau/USD quotes about $ 3,280, being held within a symmetric triangle structure and testing the key resistance in the 20 -day SMA.
- The feeling of the market remains cautious, with the investors closely observing the vote of the House of Representatives on Wednesday on the fiscal bill “One Big Beautiful” of Trump.
Gold prices (Xau/USD) are booming on Tuesday, driven by the general weakness of the US dollar and renewed concerns on the fiscal health of the United States after the moody’s reduction of US sovereign debt on Friday.
The sure shelter metal is extending its rally since Monday, supported by the deteriorated growth prospects for the world’s largest economy. The goldist bundles are now looking at the key psychological threshold of $ 3,300, with the metal rising 1.65% to quote about $ 3,280 at the time of writing.
Although the profits have been somewhat attenuated by a rebound in the yields of the US Treasury bonds and a mutual reduction of tariffs between the US and China, the changing global commercial dynamics and the persistent political uncertainty continue to provide a favorable backdrop for the precious metal.
In the face of the future, the vote of the Wednesday’s House of Representatives on the fiscal bill
The gold (xau/usd) bounces from the support with $ 3,300 again in the focus
The gold (Xau/usd) is trying a rebound on Tuesday, rising more than 1.5% to quote about $ 3,280 while proven the upper limit of a symmetrical triangle pattern formed from the historical maximum of April.
The price is approaching both the simple mobile average (SMA) of 20 days at $ 3,288 and at the Fibonacci setback level of 23.6% of the YTD movement from January to April at 3,291 $.
Despite the recent down pressure, the support level of $ 3,200 has remained firm, reinforcing the lower limit of the triangle and suggesting a strong buying interest near this area.
The relative force index (RSI) remains neutral around 52.84, indicating a clear lack of bias in the momentum for now.
Daily Gold Graph (Xau/USD)
A rupture above $ 3,291 would indicate a bullish continuation and could open the road to a new test of the historical maximum, while a break below $ 3,200 would invalidate the structure and exhibit more deep fibonacci support levels at 3,161 $ and 3.057 $.
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.
