- The price of gold attracts buyers for the third consecutive day, although the bullish potential seems limited.
- The increase in commercial tensions compensates for a stronger USD and continues to support the movement.
- The reduction of the features of fed fees could stop the Xau/USD bulls to open new positions.
The price of gold (Xau/USD) is gaining positive traction for the third consecutive day on Friday and approaches the upper end of its weekly range in the middle of the increase in commercial tensions. In a dramatic escalation of commercial wars, US President Donald Trump issued this week notices to a series of commercial partners, delineating individual tariff fees from August 1 in the absence of trade agreements. This keeps investors in suspense and affects the feeling of global risk, which, in turn, is considered a key factor that acts as a tail wind for the precious metal of safe refuge.
Meanwhile, the operators have reduced their expectations of an immediate cut of interest rates by the Federal Reserve (FED) after the publication of the optimist monthly Employment Report of the United States last week. This helps the US dollar (USD) to stand firm near its highest level in more than two weeks reached on Thursday, and could stop the operators of opening aggressive bullish bets around the price of gold, which does not yield. Therefore, it will be prudent to wait for a strong monitoring purchase before positioning yourself for any additional short -term upward movement for the Xau/USD torque.
What moves the market today: the price of gold continues to attract safe refuge flows amid commercial nerves
- The US president Donald Trump announced a 35% tariff on Canadian imports, effective as of August 1. The decision was communicated in a letter, which marks the last one in a series of more than 20 similar tariff notices that Trump has issued since Monday. This occurs after Wednesday’s announcement of a 50% tariff on US copper imports and continues to drive refuge flows towards the price of gold.
- The minutes of the Fed Monetary Policy Meeting of June 17-18 showed that the majority of those responsible for the policy are still concerned about the risk of an increase in inflationary pressure due to Trump’s aggressive commercial policies. The minutes also revealed that only a couple of officials considered that interest rates could be reduced as soon as this month, helping the US dollar to stand firm near a maximum of two weeks reached Thursday.
- In the Front of Economic Data, the US Department of Labor (DOL) reported that the initial applications for unemployment subsidy fell to 227K for the week that ended on July 5. This was less than estimated and the reading reviewed from the previous month of 232k. This, together with the stronger employment details of the US published last Thursday, points to a resistant US labor market and points out that there is no urgency so that the Fed cuts rates.
- Meanwhile, the president of the Fed of San Francisco, Mary Daly, said that monetary policy remains restrictive and is time to adjust the interest rate. The tariffs are not as high as expected, and the economic foundations support a movement towards lower rates at some point, Daly added.
- Separately, the member of the Board of Governors of the FED, Christopher Waller, said that the inflationary effects of tariffs will probably be of short duration and that a rate cut here would not be politically motivated. Waller, one of the possible favorites to replace Powell in 2026, made another call for an early rate cut in July.
- In contrast, the president of the Fed of St. Louis, Alberto Musalem, said it was too early to know if tariffs will have a specific or more persistent impact on inflation. The economy is in a good place, and is critical for the Fed to keep the expectations of long -term inflation anchored, Musalem added.
- There are no relevant economic data that move the market scheduled for publication from the US on Friday, leaving the USD at the mercy of the comments of influential members of the FOMC. Apart from this, trade related developments should contribute to providing some impetus to the Xau/USD pair on the last day of the week. At the current levels, the raw material is still on the way to finish the week with a flat tone.
The price of gold needs to exceed $ 3,340 to support the case of greater short -term appreciation
From a technical perspective, some follow-up purchase beyond the horizontal barrier of 3,340-3.342 $ will confirm a break through the simple mobile average (SMA) of 100 periods in the 4-hour graph. This, together with slightly positive oscillators in said graphic, should pave the way for an additional short-term appreciation movement and raise the price of gold towards the next relevant obstacle near the 3660-3,362 $ region. The impulse could extend even more and allow the Xau/USD to recover the 3,400 $ mark.
On the other hand, the weakness below the immediate support of $ 3,326 could attract some buyers in setback and help limit the fall in the price of gold near the round figure of $ 3,300. This is followed by the 3,283-3,282 $ region, or for a minimum of more than a week reached on Tuesday. A convincing rupture below the latter would make the Xau/USD pair vulnerable to accelerate the fall towards the minimum of July, around the 3,248-3.247 $ zone.
Tariffs – Frequently Questions
Although tariffs and taxes generate government income to finance public goods and services, they have several distinctions. Tariffs are paid in advance in the entrance port, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and companies, while tariffs are paid by importers.
There are two schools of thought among economists regarding the use of tariffs. While some argue that tariffs are necessary to protect national industries and address commercial imbalances, others see them as a harmful tool that could potentially increase long -term prices and bring to a harmful commercial war by promoting reciprocal tariffs.
During the election campaign for the presidential elections of November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy. In 2024, Mexico, China and Canada represented 42% of the total US imports in this period, Mexico stood out as the main exporter with 466.6 billion dollars, according to the US Census Office, therefore, Trump wants to focus on these three nations by imposing tariffs. It also plans to use the income generated through tariffs to reduce personal income taxes.
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.
