- The price of gold struggles to capitalize your weekly profits recorded in the last two days.
- Optimism about commercial conversations between the US and China is seen as a weight for safe refuge merchandise.
- Investors now wait for the Crucial Policy Decision of the FOMC for a new directional impulse.
The price of gold (Xau/USD) attracts strong sales during the Asian session on Wednesday and breaks a two-day streak run for up to a maximum of two weeks, around the 3,434 $ -3,3.435 $ region touched the previous day. The feeling of global risk receives a strong impulse after the announcement of commercial conversations between the US and China in Switzerland this week. This, in turn, undermines the secure refuge bullion, which, together with a modest rebound of the US dollar (USD), contributes to the intradic fall.
Meanwhile, commercial negotiations between the US and China are expected to be complex, and reach a comprehensive commercial agreement, it is expected to take time. This could maintain a limit in market optimism, which, together with the persistent geopolitical tensions, could support the price of gold. In addition, the USD bulls could choose to wait for the results of a two -day meeting of the FOMC. This further justifies caution before making aggressive bomberies around the price of gold without performance.
What moves the market today: the price of gold is pressed for the decrease in the demand for safe refuge amid optimism for commercial conversations between the US and China
- The US Treasury Secretary, Scott Besent, and the trade representative, Jamieson Greer, will meet with their Chinese counterparts in Switzerland on Saturday to discuss commercial and economic issues. This marks the first direct conversations since the US imposed tariffs on China and a step towards resolving a commercial war between the two largest economies in the world.
- Meanwhile, US President Donald Trump said Tuesday that he and senior administration officials will review possible commercial agreements during the next two weeks to decide which ones to accept. However, this contradicts Trump’s previous statement that his administration could announce trade agreements with some countries as soon as this week.
- In addition, Trump had announced 100% tariffs on the films produced outside the US and also indicated that he plans to announce new tariffs on pharmaceutical imports in the next two weeks. This keeps investors in suspense and could continue to act as a wind in favor for the price of gold shelter in the midst of the growing geopolitical risks.
- A Kremlin spokesman says that Russia will remain firm in his plans of a high fire imposed unilaterally between May 8 and 11, but warned that an appropriate response will be given immediately if Ukraine does not stop the fire. Meanwhile, Russia and Ukraine exchanged 205 prisoners of war each in an exchange mediated by the United Arab Emirates.
- Israel’s security cabinet unanimously approved a plan to expand the military offensive in Gaza. The plan implies that Israel’s defense forces (IDF) gradually invade and take control of the territory of Gaza. Although formal details were not announced, the officials said the operation would not begin until after Trump’s visit to the Middle East next week.
- Investors expect the Federal Reserve decision later on Wednesday. The Mondeary Policy Declaration that accompanies her and the comments of the president of the FED, Jerome Powell, at the press conference after the meeting will be examined in search of clues on the future path of feat cuts. This will boost the demand of the US dollar and influence yellow metal without yield.
The price of gold could accelerate the corrective drop once the decisively broke the backward support of 3,365 $ -3.360 $
From a technical perspective, the rupture sustained during the night through the horizontal barrier of 3,360 $ -365 $ and a subsequent movement beyond the 3,400 $ brand was seen as a new trigger for the bullies. In addition, the oscillators in the daily chart remain comfortably in positive territory, suggesting that the way of lower resistance for the price of gold is upwards. However, the strong bullish trend observed since the beginning of this week stops near the resistance of 3,430 $ -3.435 $. The aforementioned area should now act as a pivotal point, above which the Xau/USD could aspire to challenge the historical maximum reached in April and conquer the psychological brand of 3,500 $.
On the other hand, the weakness below the area of ​​3,365 $ -3,360 $ could find some support near the 3,328 $ -3,327 $ region before the round figure of $ 3,300. The inability to defend the mentioned support levels would deny the short -term positive perspective and make the price of gold vulnerable. The descending trajectory could then drag the Xau/USD torque towards the intermediate support of 3,265 $ -3,260 on route to the 3,223 $ -3,3,222 $ region and the minimum last week, around $ 3,200.
Commercial War between the US and China Faqs
In general terms, “Trade War” is a commercial war, an economic conflict between two or more countries due to the extreme protectionism of one of the parties. It implies the creation of commercial barriers, such as tariffs, which are in counterbarreras, increasing import costs and, therefore, the cost of life.
An economic conflict between the United States (USA) and China began in early 2018, when President Donald Trump established commercial barriers against China, claiming unfair commercial practices and theft of intellectual property by the Asian giant. China took retaliation measures, imposing tariffs on multiple American products, such as cars and soybeans. The tensions climbed until the two countries signed the Phase one trade agreement between the US and China in January 2020. The agreement required structural reforms and other changes in China’s economic and commercial regime and intended to restore stability and confidence between the two nations. Coronavirus pandemia diverted the attention of the conflict. However, it is worth mentioning that President Joe Biden, who took office after Trump, kept the tariffs and even added some additional encumbrances.
Donald Trump’s return to the White House as the 47th US president has unleashed a new wave of tensions between the two countries. During the 2024 election campaign, Trump promised to impose 60% tariff particularly in investment, and directly feeding the inflation of the consumer price index.
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.
