- The price of gold moves down while a positive risk tone continues to undermine safe refuge assets.
- The Xau/USD pair fights for attracting buyers despite the bets of feat cuts from the Fed and a weaker USD.
- However, the mixed fundamental background justifies some caution for bassists.
The price of gold (Xau/USD) maintains its tone offered during the Asian session on Tuesday, although it manages to stay above the round figure of $ 3,200. In the context of a growing commercial optimism, the hopes of a high fire between Russia and Ukraine continue to support a positive risk tone. This is evident in a generally positive tone in shares markets, which undermines the demand for traditional secure shelter assets and exerts downward pressure on the ingot.
Meanwhile, the US dollar (USD) continues with its struggle to attract significant buyers amid the growing acceptance that the Federal Reserve (Fed) will further reduce the costs of indebtedness in 2025. This, in turn, is stopping the operators of carrying out aggressive bastards around the price of gold without performance. In addition, the price action within a range observed during the last week justifies caution before positioning for any additional movement.
What moves the market today: the price of gold continues to be undermined by market optimism
- Moody’s reduced the sovereign credit classification of America on a step, to “AA1” on Friday, citing concerns about the growing indebtedness of the nation. However, this had a modest impact on the feeling of global risk amid the growing commercial optimism, which, in turn, did not help the price of safe refuge gold to capitalize on the modest profits of the previous day.
- The operators increased their bets on additional cuts of interest rates by the Federal Reserve in 2025 after the publication of weak US inflation figures and retail sales data last week. In fact, the current market setting indicates greater probabilities of at least two Fed reductions in 2025. This keeps the US dollar depressed near a minimum of one week reached Monday.
- In a more aggressive note, the president of the Fed of Atlanta, Raphael Bostic, said that inflation is not advancing towards the target as fast as anticipated, and that inflation expectations are moving worryingly. Bostic added that the number of rates cuts this year depends on how things are developed, and the details of the tariffs will be important. Bostic leans towards just a rate cut this year.
- The president of the Fed in New York, John Williams, said that recent economic data has been very good and that the labor market is quite balanced. However, Williams warned that some prospective indicators are pointing out concern. The keyword for the economy is uncertainty, and monetary policy is in a good place, added Williams.
- The Vice President of the Fed, Philip Jefferson, said that the US could face a temporary increase in the price level due to tariffs, but needs to make sure that it does not become a sustained increase in inflation. It is too early to say how the labor market will be affected by commercial policies, and the Fed will maintain the policy in its place to ensure that inflation expectations remain anchored.
- Minneapolis Fed president Neel Kashkari said the current uncertainty due to Trump administration policies has significantly affected the feeling of investors. Kashkari added that there will be many jobs in the future of the US economy and supported the waiting approach and see of the Fed until the tariff landscape stabilizes.
- In the Geopolitical Front, the Israeli army issued evacuation orders to people in Khan Yunis, the city of southern Gaza, while launching a new operation to increase the pressure on Hamas to accept a high temporary fire. In addition, the Israeli prime minister, Benjamin Netanyahu, said the defense forces will take control of the entire Gaza Strip.
- Meanwhile, US President Donald Trump announced on his social truth platform that Russia and Ukraine have agreed to begin negotiations towards a high fire immediately after separate telephone conversations with the leaders of both countries. Trump added that the conditions of bilateral conversations will be negotiated directly between the two parties.
- There are no relevant economic data that move the market scheduled for publication in the US on Tuesday, leaving USD at the mercy of the Speeches of influential FOMC members. Apart from this, trade related developments will play a key role in driving the feeling of broader risk and in the production of short -term commercial opportunities around the Xau/USD.
The price of gold needs to find acceptance below the key support of $ 3,200 so that bassists take control in the short term
From a technical perspective, the failure of the previous night near the simple mobile average (SMA) of 200 periods, which became resistance in the 4 -hour graph, and the subsequent fall favor the bassists of the XAU/USD. In addition, the negative oscillators in the schedules/day graphs suggest that the path of lower resistance for the price of gold is down.
A sales monitoring below the 3,200 $ brand and the support zone of 3,178-3.177 $ will reaffirm the perspective, which should pave the way for a fall towards the minimum of last week, around the area of $ 3,120, or the lowest level since April 10. This is closely followed by the $ 3,100 mark, which, if it is broken decisively, could expose the following relevant support near the 3,060 $ region.
On the other hand, the 3,250-3,252 $ area could continue to act as an immediate strong obstacle. A sustained strength beyond this barrier could suggest that the price of gold has touched the bottom and pave the path for additional profits beyond the intermediate resistance of 3,274-3.275 $, towards the round figure of $ 3,300. The latter should act as a key point, which, if exceeded, would change the short -term bias in favor of the bulls.
FAQS risk feeling
In the world of financial jargon, the two terms “appetite for risk (Risk-on)” and “risk aversion (risk-off)” refers to the level of risk that investors are willing to support during the reference period. In a “Risk-on” market, investors are optimistic about the future and are more willing to buy risk assets. In a “Risk-Off” market, investors begin to “go to the safe” because they are concerned about the future and, therefore, buy less risky assets that are more certain of providing profitability, even if it is relatively modest.
Normally, during periods of “appetite for risk”, stock markets rise, and most raw materials – except gold – are also revalued, since they benefit from positive growth prospects. The currencies of countries that are large exporters of raw materials are strengthened due to the increase in demand, and cryptocurrencies rise. In a market of “risk aversion”, the bonds go up -especially the main bonds of the state -, the gold shines and the refuge currencies such as the Japanese yen, the Swiss Franco and the US dollar benefit.
The Australian dollar (Aud), the Canadian dollar (CAD), the New Zealand dollar (NZD) and the minor currencies, such as the ruble (Rub) and the South African Rand (Tsar), tend to rise in the markets in which there is “appetite for risk.” This is because the economies of these currencies depend largely on exports of raw materials for their growth, and these tend to rise in price during periods of “appetite for risk.” This is because investors foresee a greater demand for raw materials in the future due to the increase in economic activity.
The main currencies that tend to rise during the periods of “risk aversion” are the US dollar (USD), the Japanese yen (JPY) and the Swiss Franco (CHF). The dollar, because it is the world reserve currency and because in times of crisis investors buy American public debt, which is considered safe because it is unlikely that the world’s largest economy between in suspension of payments. The Yen, for the increase in the demand for Japanese state bonds, since a great proportion is in the hands of national investors who probably do not get rid of them, not even in a crisis. The Swiss Franco, because the strict Swiss bank legislation offers investors greater protection of capital.
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.
