- The price of gold attracts some continuation sales as commercial optimism undermines the demand for safe refuge.
- The uncertainty about the feat cuts of the Fed keeps the USD’s bulls on the defensive and could support the merchandise.
- The operators now expect the publication of the preliminary global PMIs and the US macroeconomic data for a short -term impulse.
The price of gold (Xau/USD) remains defensive during Thursday’s Asian session and seeks to extend the strong decline drop from the previous day from its highest level since June 16. The reports that the US and the European Union (EU) are close to a tariff agreement add to the optimism led by the commercial agreement between the US and Japan. This continues to support the optimistic mood of the market and turns out to be a key factor that undermines the demand for the secure refuge ingot.
However, a combination of factors could act as a tail wind for the price of gold and limit deeper losses. Investors are still uncertain about the probable moment and the rhythm of interest rate cuts by the Federal Reserve (Fed). In addition, fears that the independence of the Central Bank could be threatened by the growing political interference keep the US dollar (USD) depressed about a minimum of two weeks and could offer support to the yellow metal that does not yield.
What moves the market today: the price of gold is pressed for the decrease in the demand for safe refuge against commercial optimism
- The president of the USA, Donald Trump, announced late on Tuesday that his administration had reached a commercial agreement with Japan. In addition, the reports that the US and the European Union are advancing towards a 15% trade agreement increase investors and weigh on the price of safe refuge gold for the second consecutive day on Thursday.
- The markets do not expect a cut of interest rates of the US Federal Reserve in July despite Trump’s continuous thrust due to lower indebtedness costs. In fact, Trump has been personally attacking the president of the FED, Jerome Powell, for his position of keeping the fees and repeatedly calling the resignation of the head of the Central Bank.
- In addition, the governor of the FED, Chris Waller, and the vice president of supervision designated by Trump, Michelle Bowman, have advocated a reduction of rates as soon as in the next policy meeting on July 30. This keeps the US dollar depressed about a minimum of two weeks and could offer some support to the yellow metal that does not yield.
- The operators now expect the publication of the preliminary PMIs, which would provide a new vision of global economic health and influence the sure shelter merchandise. Apart from this, the crucial policy decision of the European Central Bank could instill some volatility in the markets and move the Xau/USD torque.
- Meanwhile, the US economic agenda includes the initial weekly applications for unemployment subsidy and sales of new houses, which, in turn, would boost the USD and contribute to generate short -term trading opportunities around the merchandise. However, the fundamental background justifies caution for aggressive operators.
Gold price bundles have the advantage in the middle of the formation of an upward trend channel in the short term
From a technical perspective, the recent upward movement along an ascending channel since the beginning of this month points to a well -established short -term upward trend. In addition, positive oscillators in the daily chart suggest that the price of gold is more likely to find a good support near the strong horizontal resistance point of 3,370-3.368 $. However, a convincing rupture below this area could expose the lower end of the trend channel, currently located near the 3333-3.332 $ region. The latter should act as a key point, which if it breaks decisively could change the short -term bias in favor of the bassists of the Xau/USD.
On the other hand, an impulse above the $ 3,400 mark could pause near the static barrier of 3,438-3,440 $. This coincides with the resistance of the trend channel, above which the price of gold could accelerate the positive movement towards challenging the historical maximum, around the psychological brand of 3,500 $ reached in April.
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.
