- The price of gold rises as the demand for safe shelters is recovered amid additional tariff threats by Donald Trump.
- The unemployment requests and the speakers of the Fed are at the top of the US economic agenda while investors monitor the health of the US labor market.
- Xau/USD flirts with the resistance of the mobile average while the price proves the upper limit of a symmetrical triangle pattern.
The gold (Xau/USD) is rising slightly on Thursday, benefiting from the climb of global commercial tensions, since the recent tariff ads of US President Trump have revived the appetite of investors by the ingot as a traditional refuge asset.
At the time of writing, the Xau/USD is quoted about $ 3,325, with threats of persistent tariffs – the last objectives were Brazil and copper products – supporting the price of gold in the short term.
The operators look at the next fundamental catalyst, the data of unemployment applications in the US, scheduled for publication at 12:30 GMT. This report, published by the US Department of Labor, measures the number of individuals presenting new and continuous requests for state unemployment benefits and can provide information on the health of the US labor market.
Initial unemployment requests are expected to be 235,000, a slight increase since 233,000 the previous week, and continuous applications at 1.98 million. These figures are important indicators of the labor market since the Federal Reserve policy is dependent on the data. The statements of Fed Alberto Musalem, Christopher Waller and Mary C. Daly will be analyzed in search of possible policy signals later today.
Daily summary of market movements: gold rises as Trump tariffs trigger a new demand for safe refuge
- The minutes of the last policy meeting of the Federal Reserve, published on Wednesday, highlighted the concerns of officials about persistent inflation risks derived from tariffs. The minutes pointed out that “most participants noticed the risk that tariffs could have more persistent effects on inflation,” underlining a cautious posture with preference for clarity on economic perspectives.
- The markets currently assign a 67.4% probability to an interest rate cut of 25 basic points for September, according to the Fedwatch tool of the CME. This year, the Fed has consistently maintained interest rates within a range of 4.25% to 4.50%, backed by a resistant US labor market.
- Commercial tensions have intensified after President Trump announced a significant 50% tariff on copper imports, effective as of August 1, citing national security concerns. Trump declared through Truth Social: “America, once again, will build a dominant copper industry.”
- In a recent cabinet meeting on Tuesday, Trump reinforced the firmness of the date of implementation of the Tariff on August 1, insisting: “Everyone has to pay. And the incentive is that they have the right to trade in the United States.” In addition, Trump publicly criticized the president of the Fed, Jerome Powell, demanding his resignation through social truth and accusing him of politically motivated monetary policy: “The rates should have cut months ago. The only reason why they are not because Powell does not want me to win.”
- Throughout the week, the US administration sent letters related to tariffs to approximately 20 countries, including Japan and South Korea, delineating the new tariff rate.
Technical Gold Analysis: XAU/USD recovers confidence above $ 3,300
Daily Gold Graph (Xau/USD).
From a technical point of view, gold is testing the upper edge of a symmetrical triangle pattern, with the simple mobile average (SMA) of 20 days currently providing resistance at 3,344 $.
At the time of writing, the Xau/USD is maintained above the single mobile average (SMA) of 50 days at $ 3,323.
The key support is at the psychological level of $ 3,300 and the Fibonacci recoil level of 38.2% of the recovery of April at $ 3,292. In addition, the relative force index (RSI) remains close to the neutral in 49, indicating indecision in the market. Meanwhile, immediate resistance is observed in the 20 -day SMA of 3,344 $.
A decisive movement below the crucial level of $ 3,300 could open the door to additional pressure down, pointing to the 50% fibonacci setback zone and potentially to more technical sales.
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.
