- The gold briefly reaches an unprecedented maximum of $ 3.004 per ounce before settling lower by $ 2,982 amid the volatility of the US dollar.
- Geopolitical tensions increase as the fire between Russia and Ukraine wobbles; The Central Bank of China extends its bull purchase streak, which drives gold.
- The fears of recession in the US are intensified after a discouraging report on the feeling of the consumer, increasing the bets that the Fed could make the policy more flexible in 2025.
Gold prices go back after reaching a historical maximum, exceeding $ 3,000, since operators remain uncertain on the commercial policies of US President Donald Trump. This and the weakness of the US dollar led to the precious metal to reach a historical maximum of $ 3.004 per Troy ounce before going back to $ 2,982, losing 0.21% in the day.
Geopolitics is also impacting the demand for gold. The high fire between Ukraine and Russia is at a critical point, with the latter seemed reluctant to adhere to the 30 -day truce.
Meanwhile, the Popular Bank of China (PBOC) increased its bullion reserves for the fourth consecutive month in February, according to the World Gold Council (WGC).
The fears of recession around the United States economy (USA) sent the US dollar to a fall, promoting the demand for metal without performance. This increased the chances that the Federal Reserve (FED) flexible the policy in 66 basic points (PB) in 2025, lowering 74 bp a day ago.
The operators are focused on the Federal Reserve Policy (FED) decision next week. Last Friday, the president of the FED, Jerome Powell, said that “market measures on inflation expectations have increased, driven by tariffs,” pointing out concerns that commercial policies could contribute to a new pressure on prices.
As for the data, the consumer’s feeling index of the University of Michigan (UOM) recorded a discouraging figure, while inflation expectations pointed out due to the tariffs of President Trump.
The US economic agenda next week will include retail sales, housing data, Fed monetary policy decisions and economic projections.
What moves the market today: the price of gold remains stable amid a weak dollar
- The 10 -year American treasure bonus performance has recovered some land and has risen five basic points up to 4,320%.
- Real yields in the US, measured by the performance of US Treasury Treasury Values ​​Protected against Inflation (Tips), which correlates inversely with gold prices, four and a half points rise to 2,013% according to Reuters.
- The US dollar index (DXY), which tracks the value of the dollar against six currencies, falls 0.14% to 103.71.
- The consumer’s feeling survey at the University of Michigan (UOM) for March revealed a strong drop in feeling, falling to 57.9 from 64.7, well below the 63.1 forecast.
- Inflation expectations shot, with Americans projecting that inflation at 12 months will increase from 4.3% to 4.9%. For a period of five years, consumers expect inflation to increase to 3.9%, from the previous 3.5%.
- Despite the recent colder inflation data than expected, economists warn that tariffs on US imports could lead to a new inflation increase in the coming months.
- On Wednesday, 25% tariffs on steel and aluminum entered into force at midnight, since President Donald Trump is struggling to reduce the commercial deficit by applying import tariffs.
Xau/USD technical perspective: The price of gold struggles to stay above $ 3,000
The price of gold goes back after finally reaching the milestone of $ 3,000. The setback looks like a respite for the bullies before launching a second attack to achieve a daily closure above the historical maximum of $ 3.004. The following key resistance levels are $ 3,050 and $ 3,100.
On the contrary, the first support is that of 2,950 $, which, if it exceeds, could pave the way to test $ 2,900 before $ 2,850. The following support will be a minimum of February 28, $ 2,832.
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.
