- Gold has reached a new historical maximum of $ 2,942 and for now it has risen more than 11% by 2025.
- The operators prepare for the comments of the president of the FED, Powell, in his next testimony before Congress.
- The $ 3,000 are earning quickly while collateral risks emerge quickly.
The price of gold (Xau/USD) has established a new record of $ 2,942 in the first operations on Tuesday before moving on a loss for the day. Meanwhile, the president of the United States (USA), Donald Trump, has imposed 25% tariffs on steel and aluminum imports for all countries as of March 12, while China has silently imposed tariffs of retaliation about some American products. China is only showing the teeth for now and has not gone thoroughly, while President Trump is far from his promised 60% tariffs on all Chinese products, as previously announced in his campaign, Bloomberg reports.
Meanwhile, the operators will focus on the semiannual testimony of the president of the Federal Reserve (Fed), Jerome Powell, before the legislators on Tuesday and Wednesday to obtain new clues on the path that will take the monetary policy of the USA. The resistant economy will highlight as a key reason why central bankers are not in a hurry to further cut the costs of indebtedness. This is a great risk to gold this Tuesday, since it could be a bearish element for the ingot.
What moves the market today: Emergency of collateral risks
- At 15:00 GMT, the president of the FED, Jerome Powell, will testify to the US Senate Banking Committee.
- The president of the United States, Donald Trump, said on Monday that the last round of tariffs, which will enter into force in March, will strengthen national production and generate more jobs in the US in the USA. , Bloomberg reports.
- The CME Fedwatch tool shows a 93.5% probability that interest rates remain unchanged in March, compared to a scarce 6.5% probability of a rate cut of 25 basic points (PBS).
Technical Analysis: As far as it could come for now
An impressive 11% profits until now this year is making the ingot either the favorite trade for the first quarter. However, tail risks are about to play, with the president of the FED, Powell, speaking later on Tuesday in Capitol Hill. If your speech is a hard line, yields are expected to trigger, which could trigger considerable benefits in the recovery of gold.
The pivot point level on Tuesday is the first close support at $ 2,891, followed by S1 support in $ 2,871. From there, the S2 support should be at 2,835. In case of a correction, the highest level of $ 2,790 (maximum of October 31, 2024) should be able to catch any fall.
On the positive side, resistance R1 is at 2,928 $, which was already previously tested this Tuesday. In the event that the recovery is repeated in the European and American sessions, the level of 2,950 $ will be tested, which is the confluence of a large figure and the R2 resistance, for a rising rpture. Above, the psychological level of $ 3,000 could be the following.
Xau/USD: Daily graphic
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.
