- The price of gold ranges in a range on Friday and stops the night setback from a maximum of two weeks.
- The fiscal concerns of the US, commercial tensions between the US and China, and geopolitical risks support the Xau/USD couple.
- Fed rate cuts bets and the sale of USD support the prospects for new profits for precious metal.
The price of gold (Xau/USD) lacks an intra -firm direction on Friday and ranges between warm ubiquitous earnings/losses, around the 3,300 $ brand during Friday’s Asian session. However, Xau/USD bassists seem reluctant to make aggressive bets and position themselves for an extension of the previous day from a maximum of more than two weeks due to US fiscal concerns.
Meanwhile, the market for the US economic data on Thursday, mostly optimistic, turns out to be ephemeral in the midst of concerns about the deteriorated fiscal condition of the United States. performance. However, the Xau/USD pair seems to be ready to register its best weekly gain in more than a month and appreciate even more.
Daily summary of market movements: The price of gold receives support from the sustained purchase of safe refuge and a weaker USD
- The US Chamber of Representatives controlled by the Republicans approved on Thursday by little the broad draft tax and expenses of President Donald Trump. The bill, called “Great and Beautiful Project”, which will add around 3.8 billion dollars to the federal government debt during the next decade, now addresses the Senate for approval.
- This adds to the growing commercial tensions between the US and China, which have been feeding concerns about the potential economic impact. In addition, the prospects for greater policy flexibility by the Federal Reserve continue to undermine the US dollar and help the price of gold to stop the fall of the previous day.
- In the front of the economic data, the US Department of Labor (DOL) informed Thursday that the number of Americans who requested unemployment insurance fell to 227K last week. This pointed to a positive signal for the US labor market and the economy as a whole, which provided a slight impulse to the US dollar.
- Meanwhile, the preliminary S&P estimate showed that the US economy experienced a remarkable rebound in the activity of the private sector in May and the compound PMI rose to 52.1. In addition, the US preliminary manufacturing PMI increased to 52.3 in May, the highest in three months, and the PMI of services reached a maximum of two months of 52.3.
- Trump supposedly told European leaders that Russian President Vladimir Putin is not ready to end the war with Ukraine, since he thinks he is winning. In addition, the murder of two Israeli diplomats in the US maintains the geopolitical risks at stake and should offer more support for the precious metal secure refuge.
- The operators now expect the publication of the sales data of new US housing, which, together with the Speeches of influential FOMC members, will boost the demand of USD. Apart from this, commercial developments and the feeling of broader risk should provide a significant impulse to the Xau/USD torque.
The Alcista Alcista Setup of the Price of Gold supports the prospects of a movement towards recovering the round 3,400 figure
From a technical perspective, the night setback from a maximum of two weeks shows some resilience below the level of fibonacci decline of 23.6% of the recent ascending movement from the monthly minimum reached last week. In addition, positive oscillators in schedules/daily graphics favor bullish operators and support the prospects for an extension of an upward trend of more than a week. Therefore, any subsequent landslide could be seen as a purchase opportunity and find support near the confluence of 3,260-3,258 $, which includes the level of fibonacci setback of 38.2% and the simple mobile average (SMA) of 200 periods in the 4-hour graph. However, a convincing rupture below could cause technical sales and pave the path for deeper losses, towards the 50% recoil level around the 3,232 $ region, en route to the round figure of $ 3,200.
On the contrary, the area of ​​3,320-3,325 $ could act as an immediate obstacle before the maximum night oscillation, around the $ 3,346 area. Some monitoring purchases have the potential to raise the price of gold beyond the intermediate obstacle of 3,363-3,365 and allow the bullies to recover the round figure of 3,400 $. A sustained strength beyond the latter will reaffirm the short -term positive perspective and prepare the scenario for an additional movement of appreciation.
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.
