- The price of gold earns some positive traction after Thursday’s late backward from a maximum of several weeks.
- The optimism in commercial conversations between the US and China slows down the Xau/USD bulls to perform aggressive bets.
- A modest USD rebound helps to limit the commodity before the US NFP report.
The price of gold (Xau/USD) goes back slightly from the daily maximum and quotes with a slight positive bias, above the level of $ 3,350 during the first part of the European session on Friday. The US dollar (USD) gains some positive traction and moves away from its lowest level since April 22 established on Thursday in the midst of repositioning operations before the crucial report of non -agricultural payrolls (NFP) of the USA. Precious safe refuge.
However, the rapid position of US President Donald Trump about commercial policies, together with the geopolitical risks derived from the prolonged war between Russia and Ukraine and conflicts in the Middle East, could maintain a limit to any optimism in the markets. In addition, US fiscal concerns and bets that the Federal Reserve (FED) will further reduce indebtedness costs in 2025 could limit any additional appreciation of the USD, which, in turn, could continue to support the price of gold. Operators could also choose to stay on the sidelines as the risk of key data is approaching.
What moves the market today: gold price operators seem reluctant to open directional positions before the US NFP report.
- US president Donald Trump and Chinese leader Xi Jinping agreed more conversations to resolve commercial disputes. In addition, Trump said the call was almost completely focused on commerce and resulted in a very positive conclusion, which caused an intraced decline in the price of gold from a maximum of more than four weeks on Thursday.
- However, the initial market reaction turns out to be ephemeral due to the rapid changing posture of Trump about commercial policies. To this is added that some repositioning operations before the US Non -Agricultural Payroll (NFP) report help the Xau/USD torque to recover some positive traction during Friday’s Asian session.
- The shocking monthly US employment data is expected to show that the world’s largest economy added 130,000 new jobs in May, after the strongest increase than expected of 177,000 registered in the previous month. Meanwhile, it is anticipated that the unemployment rate remains stable at 4.2% during the month reported.
- A series of other employment readings published this week pointed to a cooling in the US labor market, which should give to the Federal Reserve more Impetu to cut interest rates. Currently, operators are valuing the possibility that the US Central Bank will make at least two 25 -point rate cuts for the end of the year.
- However, recent comments from several Fed officials suggest that the US Central Bank could opt for a waiting approach and see in the middle of the persistent uncertainties related to trade. Therefore, crucial details on employment in the US will be observed to obtain new perspectives on the Fed policy and move the US dollar.
The Alcist Technical Setup of the Price of Gold supports the case for an eventual rupture through a range of several days
From a technical perspective, the upper limit of a range of several days, around the round figure of $ 3,400, now seems to have emerged as an immediate barrier. Since the oscillators in the daily chart are maintained in positive territory, a sustained strength beyond that level will be seen as a new trigger for the bullies. The subsequent ascending movement could raise the price of gold to the intermediate obstacle of 3,433-3,435 on route to the neighborhood of $ 3,500, or the historical maximum established in April.
On the other hand, the area of ​​3,334-3.333 $, or the lower end of the range, could continue to protect the immediate decline. Some continuation sales, which lead to subsequent sliding below the horizontal resistance point of 3,326-3.324 $, now converted into support, could drag the price of gold below the round figure of $ 3,300, to the 3,286-3.285 $ region.
Fed Faqs
The monetary policy of the United States is directed by the Federal Reserve (FED). The Fed has two mandates: to achieve prices stability and promote full employment. Its main tool to achieve these objectives is to adjust interest rates. When prices rise too quickly and inflation exceeds the objective of 2% set by the Federal Reserve, it rises interest rates, increasing the costs of loans throughout the economy. This translates into a strengthening of the US dollar (USD), since it makes the United States a more attractive place for international investors to place their money. When inflation falls below 2% or the unemployment rate is too high, the Federal Reserve can lower interest rates to foster indebtedness, which weighs on the green ticket.
The Federal Reserve (FED) celebrates eight meetings per year, in which the Federal Open Market Committee (FOMC) evaluates the economic situation and makes monetary policy decisions. The FOMC is made up of twelve officials of the Federal Reserve: the seven members of the Council of Governors, the president of the Bank of the Federal Reserve of New York and four of the eleven presidents of the regional banks of the Reserve, who exercise their positions for a year in a rotary form.
In extreme situations, the Federal Reserve can resort to a policy called Quantitative Easing (QE). The QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non -standard policy measure used during crises or when inflation is extremely low. It was the weapon chosen by the Fed during the great financial crisis of 2008. It is that the Fed prints more dollars and uses them to buy high quality bonds of financial institutions. The one usually weakens the US dollar.
The quantitative hardening (QT) is the inverse process to the QE, for which the Federal Reserve stops buying bonds from financial institutions and does not reinvote the capital of the bonds that it has in portfolio that they expire, to buy new bonds. It is usually positive for the value of the US dollar.
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.
