- The price of gold shoots and jumps from less than $ 3,000 to $ 3,132 on Thursday.
- Variable rental markets are on fire, recovering after Trump’s announcement of a 90 -day break in reciprocal tariffs.
- Gold could reach a new historical maximum later in the day.
The price of gold (Xau/USD) is offering impressive yield this Thursday in the first negotiation session, moving around $ 3,107 at the time of writing. Since Tuesday morning, precious metal has risen almost 5.00%. The main engine of recovery came from the president of the United States (USA), Donald Trump, who announced a 90 -day break in the highest tariffs to 56 countries and the European Union, which will now be taxed at the base rate of 10%.
Trump also increased tariffs to China to 125%, with immediate effect, after the Asian country announced plans to retaliate with an 84% tariff over all US imports that will enter into force on Thursday. These movements are exacerbating concerns that the two largest economies in the world continue to climb the commercial war. The Popular Bank of China (PBOC), the Central Bank of China, weakened the Yuan (CNY) for sixth consecutive session, despite the warning of the US Treasury Secretary, Scott Besent, that the country should not do it on Tuesday. It seems that Beijing will use the country’s currency as a negotiation tool, as it did in the last commercial war.
What moves the market today: stimulus drag in China
- The constant sway of the US Administration Tariff Plan has shaken the entire world, while investors rush to find direction and certainty. That has been generally favorable for gold, which has risen 18% this year. The yellow metal has also been supported by the hopes of greater monetary relief of the Federal Reserve and purchases by central banks, reports Bloomberg.
- The Fedwatch of the CME tool shows that the possibilities of an interest rate cut by the Federal Reserve (FED) in May have decreased to only 19.5% compared to 44.6% seen on Tuesday. For June, the lower indebtedness costs are 75.3%.
- Gold is quickly approaching the maximums recent, with today’s impulse accompanied by a report that Chinese leaders are gathering to discuss stimulus measures. However, there is a broader image that favors gold, which is that other financial assets are failing to maintain their value as a safe refuge. The precious metal fell after the global financial crisis (GFC) of 2008 and then began a climb of several years that still continues. Long -term investors and even central banks are making the bullion a central possession through all market conditions, reports Reuters.
Technical analysis of the price of gold: gold is recovered despite the 90 -day break in tariffs
The precious metal recovers a loss of two days with a similar movement backed by President Trump’s comments and the 90 -day delay in tariffs. A delay is just a pause and does not guarantee that agreements will be made with all countries. Tensions will arise again if certain significant commercial agreements do not materialize before that deadline of 90 days.
The first R1 resistance at $ 3,131 is being tested at the time of writing, followed by the current historical maximum of $ 3,167. Just above, R2 resistance at $ 3,180 will be a strong limit on the top.
In the lower part, the daily pivot point is at 3,050 $ on Thursday, with the key level of March 10 at 3,057 $. If this area is not maintained as support, bassists can point to S1 support at $ 3.002, with the maximum of March 14 in $ 3,004 and the psychological level of $ 3,000 making this area a strong support zone.
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.
