- The price of gold attracts sellers for the fourth consecutive day in the midst of the news of the tariff block.
- The sustained purchase of USD and hard -line FomC minutes weigh even more about the Xau/USD torque.
- Commercial tensions between the US and China and geopolitical risks help to limit precious metal losses.
The price of gold (Xau/USD) touched a minimum of a week and a half, around the area of ​​3,246-3.245 $ during the Asian session on Thursday in reaction to the news that a federal court blocked the commercial tariffs of the president of the USA, Donald Trump, to enter into force. The decision led to a strong rebound in the risk trade and weighed strongly on traditional safe shelter assets, which, in turn, is considered a key factor that exerts pressure on the ingot for the fourth consecutive day.
The news of the tariff block is added to the minutes of the Hard Line FomC published on Wednesday, which help the US dollar (USD) to attract a strong follow -up purchase and contribute to diverting flows from the price of gold, which does not yield. That said, the uncertainty about US business policies and the worsening of the US fiscal situation maintain a brake on market optimism and USD, helping the Xau/USD torque to cut part of intra -intradia losses.
What moves the market today: the price of gold continues to lose ground in the midst of a combination of negative factors
- A Federal Court of the United States blocked on Wednesday the “Liberation Day” tariffs of President Donald Trump to enter into force. The International Trade Court ruled that the president exceeded his authority by imposing general tariffs on imports from all countries in the world.
- Investors celebrated the order of the court, which is evident for a strong increase in shares markets on Thursday. This, in turn, is considered to weigh strongly on traditional safe shelter assets and drag the price of gold downward for the fourth consecutive day in the middle of a strong American dollar purchase.
- The macroeconomic data of the USA best as expected this week calmed the recession fears. In addition, the minutes of the May meeting of the Federal Reserve published on Wednesday revealed a consensus to maintain a waiting position in the fees in the midst of uncertainty about economic perspectives and commercial policies.
- Fed officials highlighted the need to keep interest rates on hold for some time until the net economic effects of the series of changes in government policies become clearer. This, in turn, raises the USD index (DXY) beyond the 100 brand and undermines the yellow metal that does not yield.
- Meanwhile, it is reported that the Trump administration is moving to restrict the sale of critic technologies from the US, including those used in the manufacture of semiconductors and certain chemicals, to China. This, together with the persistent geopolitical risks, offers support for the Xau/USD.
- Israel’s Minister of Defense, Israel Katz, announced on Wednesday that his combat planes attacked the target of the Houthi militant group at Sanaa airport, Yemen, for the second time in a month. This attack occurs after Houthis triggered several missiles against Israel in recent days.
- Russia has proposed to celebrate the next round of direct peace conversations with Ukraine in Istanbul on June 2 amid Trump’s growing pressure to end the war. Russian Fuentes said that President Vladimir Putin wants a written promise of Western powers not to expand the NATO alliance led by the US to the east.
- The operators now wait for the US economic agenda on Thursday, which includes the publication of the preliminary GDP of Q1, the initial weekly applications of unemployment subsidy and the sales of pending homes. However, care is still focused on the US Personal Consumption Expenditure Index (PCE) on Friday.
The technical configuration of the gold price favors bassists and suggests that any recovery attempt could be sold
From a technical perspective, the intradication fall stops close to the level of decline of 50% of the recent moderate recovery from the monthly minimum. However, the breakdown on Wednesday below a short -term upward trend line and the simple mobile average (SMA) of 200 periods in the 4 -hour graph favor bassists. In addition, the negative oscillators in this time frame suggest that the path of lower resistance for the price of gold is down.
Therefore, any subsequent recovery is more likely that in front of a strong barrier and remain limited before the 300 $ brand, or the 200 periods SMA in the 4 -hour graph. However, some monitoring purchase, which leads to an additional movement beyond the Fibonacci recoil level of 23.6%, could trigger a short coverage rally and raise the price of gold towards the obstacle of 3,324-3.325 $ en route to the next relevant resistance near the supply zone of 3,345-3.350 $.
On the contrary, bassists could now expect a sustained weakness below the minimum of the Asian session, around the 3,246-3,245 $ region (50%recoil level), before opening new positions. The subsequent fall could drag the price of gold towards the Fibonacci recoil level of 61.8%, around the 3,215 region. The downward trajectory could be extended to the round figure of $ 3,200 before the Xau/USD finally falls to the support of $ 3,180.
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.
.jpg "Miley Cyrus likes to amaze her audience: Something Beautiful’s review"){kind=small}
