- The price of gold earns traction as a weakened US dollar makes metal more accessible to foreign currency holders.
- Gold, which does not generate performance, rises as inflation data in the most soft US has strengthened the expectations of feat cuts in Fed as soon as in June.
- The US dollar continues in decline, weighed by persistent concerns about both global and national economic perspectives.
The price of gold (Xau/USD) continues to rise for a fourth consecutive session, around a new historical maximum of $ 3,220 per Troy ounce, reached on Friday. The precious metal is gaining impulse as a weaker US dollar makes it more affordable for foreign currency holders.
The demand for investors for refuge assets such as gold has also increased in the midst of the growing commercial tensions between the US and China. On Thursday, the US drastically increased tariffs on Chinese imports, imposing a new 125%tax on an existing 20%tax, raising the total to 145%. This aggressive movement eclipsed the 90 -day delay of President Donald Trump in the highest tariffs for other countries, increasing the fears of broader economic repercussions.
Further supporting the rebound of gold, inflation data in the US for March, which were softer than expected, have fed speculation about possible Federal Reserve Rate Cuts They could start as soon as in June. The markets are now valuing the possibility of to a complete percentage point in rates reductions for the end of the year. He Consumer Price Index (CPI) of the USA showed that general inflation was softened to 2.4% year -on -year, below the provision of 2.6% and lowering from 2.8% in February. The underlying IPC, which excludes food and energy, increased only 2.8%, also below expectations. In monthly terms, the general CPI fell 0.1%, while the underlying CPC rose 0.1%.
What moves the market today: the price of gold rises while the US dollar fights in the midst of economic concerns
- The dollar index (DXY), which measures the US dollar in front of a basket of six main currencies, is negotiating down around 100.20 at the time of writing. The DXY continues to slip in the midst of persistent concerns about both global and US economic perspectives. Investors are now directing their attention to the next publication of the US Producer Index (IPP) for March for March and the preliminary data of feeling of the Michigan consumer, both scheduled for later Friday.
- In a movement destined to relieve commercial tensions, President Trump announced on Wednesday a 90 -day pause in new tariffs for most US commercial partners, reducing 10% rates to create space for continuous negotiations. “The 90 -day pause is an encouraging sign that negotiations with most countries have been productive,” said Nationwide Mark Hacktt. “It also injects very necessary stability into a market shaken by uncertainty.”
- The minutes of the last meeting of the Federal Open Market Committee (FOMC) suggested that those responsible for the policy are almost unanimous in recognizing the double challenge of growing inflation and slow growth, warning that the Federal Reserve faces “difficulties in decisions” in the coming months.
- China’s CPI decreased 0.1% year -on -year in March, after a fall of 0.7% in February and being below the expectations of an increase of 0.1%. Monthly, the CPI fell 0.4%, worse than the fall of 0.2% of the previous month and the forecast figure. China’s IPP also contracted more than expected, falling 2.5% annually in March compared to a 2.2% drop in February and a 2.3% decrease projection.
- The president of the United States, Donald Trump, announced a 90 -day break in tariff increases for most US business partners. Although China’s tariffs were still raised, the broadest relaxation of commercial tensions helped to calm global economic fears, improving the feeling of the market and limiting the bullish potential of the parista of the parrio of the parrio of the pair of XAU/USD.
- The latest minutes of the Federal Open Market Committee (FOMC) suggested a wide concern among those responsible for the policy about the challenge of balancing inflation risks with slow economic growth. The president of the Fed of Dallas, Lorie Logan, warned that unexpected commercial measures could cause losses of employment and inflation, which could force the Fed to adopt a defensive position. Weekly unemployment subsidy applications also increased slightly to 223,000.
The price of gold proves the upper limit of the upward channel above $ 3,200
The price of gold is being negotiated about $ 3,210 on Friday, with Graphic indicators diary showing a persistent bullish while the Par tries to break above the upper limit of an ascending channel pattern. However, the 14 -day relative force index (RSI) maintains its position slightly below the 70th brand, suggesting a downward correction as soon as possible.
On the positive side, the price of gold could explore the region around the psychological level of $ 3,300.
The price of gold could find support in the nine -day EMA at $ 3,102. A rupture below this level could weaken the impulse of the short -term price and exert the downward pressure on the torque Xau/usd to test the lower limit of the upward channel at the level of $ 3,000.
Xau/USD: Daily graphic
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.
