- Gold reaches a new historical maximum while Trump attacks Powell, calling him “a great loser” for delaying rates cuts.
- The DXY collapses to 97.92 while the independence of the Fed is questioned and the risks of stagflation remain in the focus.
- Traders prepare for key speeches of the Fed this week of Jefferson, Harker and Kashkari in the midst of a growing political uncertainty.
The price of gold begins the week in a high note, winning more than 2.56% and renewing a previous record when reaching $ 3.430 amid the uncertainty about comments that threaten to restrict the independence of the Federal Reserve (FED). At the time of writing, the XAU/USD quotes at $ 3,419 after reaching a daily minimum of $ 3,329.
The demand for bullion has increased since the president of the United States (US), Donald Trump, continues to put pressure on the Fed. The president of the Fed, Jerome Powell, called him “a great loser” and said he always arrives too late to reduce the costs of indebtedness.
Last week, Powell said that the US Central Bank is in waiting mode and even mentioned the possibility of a stagning scenario, recognizing: “We could find ourselves on the challenging stage in which our double mandate goals are in tension.”
The growing tensions between Trump and Powell, together with controversial commercial policies, weighed on the dollar, which, according to the US dollar index (DXY), has fallen to a minimum of three years of 97.92.
As for data, the US economic agenda is absent, although it is expected to charge impulse mainly supported by the speakers of the Fed. Vice President Philip Jefferson, the president of the Fed of Philadelphia Patrick Harker and Neel Kashkari of Minneapolis are scheduled to offer comments on Tuesday.
Daily summary of market movements: The price of gold triggers a historical maximum amid high yields in the US
- The 10 -year American treasure bonus performance rises four basic points to 4,373% but fails to contain the prices of the ingot.
- The real yields in the US followed the same trend, uploading three and a half basic points to 2.14%, as shown by the yields of the treasure values against inflation to 10 years from the US.
- In the rates markets, the monetary market traders have incorporated 94.5 basic points of Fed features by the end of 2025, with the first expected cut in July.
- As for data, this week the US economic agenda will be full of a series of Fed speakers, the PMIS Flash of Global S&P, the requests for durable goods and the final reading of the feeling of the consumer of the University of Michigan.
Xau/USD technical perspective: The price of gold is prepared to challenge the short -term $ 3,450
The upward trend in gold prices remains at stake, even with the possibility of testing the level of $ 3,500 that CITI has predicted that it will be reached in the next three months. The relative force index (RSI) became overnspted, indicating that precious metal could be prepared for a setback, but a break in the last peak suggests that bulls could reach $ 3,450 in the short term.
On the contrary, if the Xau/USD falls below $ 3,400, the first support would be the maximum of April 17, $ 3,357, followed by $ 3,300.
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.
