- The price of gold is with new sales on Friday in the middle of the appearance of some purchases at lower levels of the USD.
- Commercial tensions, geopolitical risks and Fed rate cuts should limit losses to the raw material.
- Operators expect the US Personal Consumption Expenditure Index (PCE) for Fed Rate Cutting Betting and a new impulse.
The price of gold (Xau/USD) struggles to capitalize on the strong recovery movement of the previous day from the 3,246-3,245 $ region, or more than a minimum of one week, and attracts new sales during the Asian session on Friday. The US dollar (USD) recovers some positive traction after the dramatic intra -dome turn on Thursday, in the middle of a certain repositioning before the US crucial inflation report. This, in turn, is considered to undermine the demand for the ingot. However, a combination of factors should act as a tail wind for the raw material and help limit deeper losses.
A Federal Court of Appeals on Thursday suspended a ruling from a separate commercial court that blocked the tariffs of US President Donald Trump. This adds a layer of uncertainty, which, together with the persistent geopolitical risks, should offer some support for the price of safe refuge gold. In addition, the growing acceptance that the Federal Reserve (FED) will further reduce the costs of indebtedness in 2025 could limit any significant appreciation of the USD and support the prospects for some purchases to arise at lower levels around the yellow metal that does not yield, justifying the caution for bassists.
What moves the market today: the price of gold moves down while the repositioning trade before the US PCE leads to a modest increase in USD
- The strong recoil of the US dollar during the night lacks monitoring, since the bassists seem reluctant before the publication of the crucial Personal Consumption Expenditure Index (PCE) of the USA. Later this Friday.
- A Federal Court of Appeals on Thursday temporarily reinstated the large commercial tariffs of President Donald Trump, a day after a separate commercial court considered them illegal and ordered an immediate blockade.
- Meanwhile, the Wall Street Journal (WSJ) reported late on Thursday that the Trump administration is considering an existing law that includes a language that allows tariffs of up to 15% for 150 days.
- Kremlin spokesman Dmitry Peskov said Thursday that Russia, so far, has not received a response from Ukraine about his proposal to celebrate the next round of peace conversations in Istanbul next week.
- White House spokeswoman, Karoline Leavitt, told journalists that Israel has accepted a proposal of high US fire of Hamas said that the terms did not meet their demands, maintaining the geopolitical risks at stake.
- Operators have been valuing the possibility that the Federal Reserve (FED) intervenes to support the economy and make at least two interest rate cuts of 25 basic points by the end of this year.
- However, the minutes of the May meeting of the FOMC published on Wednesday revealed a consensus to maintain the position of waiting and seeing in the midst of uncertainty about economic perspectives and commercial policies.
- Meanwhile, the president of the Chicago Fed, Austan Goolsbee, said that the US Central Bank could return to a situation where interest rates could lower if tariffs are avoided by means of an agreement or otherwise.
- In addition, the president of the Fed of San Francisco, Mary Daly, said that two rate cuts this year would make sense if the labor market remains solid and inflation falls, but the range of possible risks is large.
- Separately, the president of Dallas, Lorie Logan, said that the risks to employment and inflation objectives are approximately balanced. If the balance moves, the Fed is well prepared to respond, added Logan.
- The president of the FED, Jerome Powell, on the other hand, met with the president on Thursday and reiterated that monetary policy decisions are based on the EE.U -incoming economic data.
- Therefore, the crucial inflation data on Friday will play a key role in the influence of expectations on the trajectory of feat cuts of the Fed, which will boost the USD and provide a new impulse to the Xau/USD torque.
The price of gold could extend its downward trajectory towards the minimum of the previous night, around 3,246-3.245 $
From a technical perspective, the failure of the previous night near the horizontal resistance of 3,325-3.326 $ and a subsequent sliding below the 300 $ brand favor the bassists of the XAU/USD. In addition, the oscillators in the 4-hour graph have begun again to gain negative traction and support the case for an additional intra-intradia depreciation movement of the price of gold. Therefore, a certain weakness of follow-up towards the static support of $ 3,280, en route to the minimum of the previous night around the 3,246-3.245 $ region, it seems a different possibility. A convincing break below the latter should pave the way for deeper losses and expose the round figure of $ 3,200.
On the contrary, the area of ​​3,325-3,326 could continue to act as an immediate obstacle before the supply zone of 3,345-3.350 $. A sustained strength could nullify the negative perspective and trigger a new short coverage movement, which should allow the price of gold to recover the $ 3,400 mark. The impulse could extend even more towards the next relevant barrier near the 3,432-3.434 $ region.
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.
