- The price of gold recovers positive traction and reverts part of the losses inspired by the NFP on Thursday.
- The fiscal concerns of the US weigh on the USD and provide support to the merchandise amid commercial uncertainties.
- Liquidity reduced by holidays could stop the Xau/USD operators to carry out new directional bets.
The price of gold (Xau/USD) attracts some purchases in falls on Friday and reverses part of the back of the previous day from a maximum of a week and a half. The US dollar (USD) struggles to capitalize on Thursday’s profits after the NFP in the midst of concerns that the ‘One Big Beautiful Bill’ of the US President Donald Trump would worsen the country’s fiscal situation. This, together with the persistent uncertainties related to trade, further supports the precious metal of safe refuge.
Meanwhile, operators reduced the expectations that the Federal Reserve (FED) will cut interest rates in July after the publication of an employment report in the US wider than expected. This, together with a generally positive risk tone, could stop the Xau/USD bulls when making aggressive bets and limiting profits. However, the price of gold maintains its purchase tone for the European session and is still on its way to closing positively for the first time in three weeks.
What moves the market today: the price of gold benefits from a weaker USD and sure shelter purchases
- The US dollar played a maximum of a week on Thursday after the US Labor Statistics Office reported that non -agricultural payroll increased by 147,000 in June, exceeding 111,000 forecasts. In addition, the unemployment rate fell to 4.1%, from 4.2% in May, and faded the hopes of an early cut of interest rates by the Federal Reserve.
- Other details of the report showed that salary growth, measured by the change in average time profits, slowed 0.2% in June from the previous 0.4% and retreated 3.7% from 3.8% in May. This helps relieve concerns about inflation and keeps the door open for at least two cuts of 25 basic points by the end of this year.
- The bill of tax cuts and expenses of President Donald Trump exceeded his last obstacle in Congress on Thursday. According to the Congress Budget Office, the legislation will add 3.4 billion dollars to the national debt. This could make further worsen the long -term debt problems of the US, which limits the USD and supports the price of gold.
- Meanwhile, Trump said he plans to start sending letters informing commercial partners about their tariff rates as soon as Friday, since negotiations to avoid higher US encumbrances enter the final stage. His comments arrive days before the deadline of July 9 for higher reciprocal tariffs and act as a tail wind for the precious metal of safe refuge.
- The US markets will be closed on Friday of independence day, which justifies caution before making aggressive bets around Xau/USD in the midst of liquidity reduced by vacations. However, the merchandise is still on its way to breaking a two -week loss streak and the fundamental background of support favors the upward operators.
The technical configuration of the gold price favors the bulls; Acceptance is expected above the SMA of 100 in H4
From a technical perspective, repeated failures of this week to build on the impulse beyond the simple mobile average (SMA) of 100 periods in the 4 -hour graph justify a certain caution for the xau/USD bulls. The aforementioned barrier is currently located near the area of ​​3,352-3,355 and should act as a key point. This is closely followed by the maximum of the night oscillation, around the 365-3,366 $ region, above which the price of gold could aspire to recover the round figure of $ 3,400.
On the contrary, the area of ​​3,326-3.325 now seems to protect the immediate drop before the region of 3,311-310 $ and the round figure of $ 3,300. A convincing rupture below the latter could change the short -term bias in favor of the bearish operators and make the price of gold vulnerable to accelerating the fall towards the following relevant support near the horizontal zone of $ 3,270. The descending trajectory could extend even more towards the monthly minimum proof, around the 3,248-3,248 $ region.
Fed – Frequently Questions
The monetary policy of the United States is directed by the Federal Reserve (FED). The Fed has two mandates: to achieve prices stability and promote full employment. Its main tool to achieve these objectives is to adjust interest rates. When prices rise too quickly and inflation exceeds the objective of 2% set by the Federal Reserve, it rises interest rates, increasing the costs of loans throughout the economy. This translates into a strengthening of the US dollar (USD), since it makes the United States a more attractive place for international investors to place their money. When inflation falls below 2% or the unemployment rate is too high, the Federal Reserve can lower interest rates to foster indebtedness, which weighs on the green ticket.
The Federal Reserve (FED) celebrates eight meetings per year, in which the Federal Open Market Committee (FOMC) evaluates the economic situation and makes monetary policy decisions. The FOMC is made up of twelve officials of the Federal Reserve: the seven members of the Council of Governors, the president of the Bank of the Federal Reserve of New York and four of the eleven presidents of the regional banks of the Reserve, who exercise their positions for a year in a rotary form.
In extreme situations, the Federal Reserve can resort to a policy called Quantitative Easing (QE). The QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non -standard policy measure used during crises or when inflation is extremely low. It was the weapon chosen by the Fed during the great financial crisis of 2008. It is that the Fed prints more dollars and uses them to buy high quality bonds of financial institutions. The one usually weakens the US dollar.
The quantitative hardening (QT) is the inverse process to the QE, for which the Federal Reserve stops buying bonds from financial institutions and does not reinvote the capital of the bonds that it has in portfolio that they expire, to buy new bonds. It is usually positive for the value of the US dollar.
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.
