- The price of gold rises for the fourth consecutive day in the midst of a combination of support factors.
- The US fiscal concerns and the betting of fees of the Fed undergo the USD, benefiting the precious metal.
- The renewed commercial tensions between the US and China and geopolitical risks further support the Xau/USD.
The price of gold (Xau/usd) attracts buyers for the fourth consecutive day and reaches a maximum of almost two weeks during the Asian session on Thursday. The reduction of the US sovereign credit rating by Moody’s and the growing concerns about the increase in the American deficit, following the wide fiscal reform of President Donald Trump, keep investors in vilo. In addition, renewed commercial tensions between the US and China and geopolitical risks affect the feeling of global risk, which, in turn, benefits the precious metal of safe refuge.
Meanwhile, the US dollar (USD) languishes about a minimum of two weeks amid bets that the Federal Reserve (FED) will further reduce indebtedness costs in 2025, due to the decrease in inflationary pressures and a slow economic growth overview. In addition, a poor response to the 20 -year bond auction of the United States reinforced the opinion that market participants are moving away from US assets. This, in turn, contributes to the USD vendor bias and provides additional support to the price of gold, which does not yield.
What moves the market today: the price of gold benefits from the sustained demand for safe refuge and a weaker USD
- The Rules Committee of the US House of Representatives, controlled by the Republicans, voted to advance the broad draft of tax cuts and expenses of President Donald Trump, preparing the land for a vote in the Plenary of the Chamber. The very anticipated “a great and beautiful bill” could add between 3 and 5 billion dollars to the already heavy debt load of the country.
- In addition, a crucial auction of treasure bonds at 20 years on Wednesday showed a weak demand, which points to growing concerns that the Tax and Expenses bill will make the US budget deficit worse at a faster rate than expected. This occurs after Moody’s reduced US sovereign credit rating from the maximum “AAA” last Friday.
- The US dollar has been in the downward trend due to the fiscal concerns of the USA. In addition, the bets that the Federal Reserve will reduce interest rates even more this year, amid evidence of a decrease in inflation and a gloomy prognosis of growth, they continue to push the USD down, raising the price of gold, which does not yield, to a maximum of almost two weeks on Thursday.
- Meanwhile, China accused the United States of abusing export control measures and violating trade agreements in Geneva after the US issued a guide warning companies that do not use the chips of the Ascend de Huawei. China’s Ministry of Commerce said Wednesday that US measures on advanced chips are “typical of unilateral harassment and protectionism.”
- In the Geopolitical Front, the Israel Army continued to bombard the Gaza Strip and block the desperately necessary food aid. In addition, Trump supposedly told European leaders that Russian President Vladimir Putin is not ready to end the war with Ukraine, since he believes he is winning, which provides additional support to the sure shelter merchandise.
- The operators now expect the publication of preliminary PMISs to obtain a new perspective on global economic health. The US economic agenda also includes the publication of the usual initial weekly applications for unemployment and sales of existing housing, which could influence the USD. This, together with the feeling of broader risk, could boost precious metal.
The technical configuration of the price of gold supports the prospects of a movement beyond the resistance of $ 3,363-3,365
From a technical perspective, the Xau/USD torque seems to have found acceptance above the 61.8% fibonacci setback level of the recent fall from the monthly peak. This occurs after this week’s break through the resistance zone of $ 3,250-3,255 and favors upward operators. In addition, the oscillators in the daily chart have been gaining positive traction and suggest that the road of lower resistance for the price of gold is still upwards. Therefore, a subsequent movement towards the following relevant obstacle near the region of $ 3,363-365, en route to the round figure of $ 3,400, seems like a different possibility.
On the other hand, the area of $ 3,316-3,315, or the level of resistance of the 61.8% fibonacci, seems to protect the immediate drop before the $ 3,300 mark. Any additional drop below the $ 3,285 area is more likely to attract new buyers and remain limited near the obstacle of $ 3,255-3,250 that has become support. However, a convincing rupture below the latter could cause some technical sales and drag the price of gold to the $ 3,200 mark.
US dollar price this week
The lower table shows the percentage of the US dollar change (USD) compared to the main currencies this week. American dollar was the strongest currency against the Australian dollar.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -1.28% | -1.07% | -1.36% | -0.89% | -0.68% | -0.75% | -1.41% | |
| EUR | 1.28% | 0.20% | -0.02% | 0.47% | 0.74% | 0.61% | -0.12% | |
| GBP | 1.07% | -0.20% | -0.52% | 0.27% | 0.54% | 0.40% | -0.32% | |
| JPY | 1.36% | 0.02% | 0.52% | 0.49% | 0.86% | 0.83% | 0.00% | |
| CAD | 0.89% | -0.47% | -0.27% | -0.49% | 0.24% | 0.14% | -0.58% | |
| Aud | 0.68% | -0.74% | -0.54% | -0.86% | -0.24% | -0.13% | -0.83% | |
| NZD | 0.75% | -0.61% | -0.40% | -0.83% | -0.14% | 0.13% | -0.72% | |
| CHF | 1.41% | 0.12% | 0.32% | -0.01% | 0.58% | 0.83% | 0.72% |
The heat map shows the percentage changes of the main currencies. The base currency is selected from the left column, while the contribution currency is selected in the upper row. For example, if you choose the US dollar of the left column and move along the horizontal line to the Japanese yen, the percentage change shown in the box will represent the USD (base)/JPY (quotation).
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.
