- The price of gold begins the new week in a weaker tone in reaction to optimism on the commercial agreement between the US and China.
- The decrease in the fears of recession in the US and the aggressive Pause of the Fed support the USD and weigh even more on the merchandise.
- Xau/USD bassists expect details about the US agreement.-China before positioning themselves for any significant fall.
The price of gold (Xau/USD) remains in intra -ease losses during the Asian session on Monday, since the last optimism on a commercial agreement between the US and China continues to undermine the demand for traditional assets of safe refuge. Meanwhile, the positive signals of high -level conversations between the US and China relieve market concerns about a recession in the US. This, together with the aggressive break of the Federal Reserve (Fed), helps the US dollar (USD) to stand firm near a maximum of several weeks and exert pressure on the merchandise.
However, operators now seem reluctant to make aggressive bets and choose to wait for the joint statement of the US and China at 07:00 GMT for more details about the agreement. This could help limit additional losses of the price of gold, although the fundamental background supports the prospects of a new depreciation movement. Therefore, any recovery attempt could be seen as a sales opportunity and runs the risk of fading quickly in the absence of any relevant macroeconomic publication of the USA.
What moves the market today: gold price bassists have the advantage while investors expect with interest the US statement.
- The US and China finished high -level commercial conversations in Switzerland with a positive note on Sunday. In fact, US Treasury Secretary Scott Besent, and Commerce Representative Jamieson Greer said a commercial agreement with China had been reached.
- In addition, the Deputy Prime Minister of China, He Lifeng, said that the meeting achieved substantial progress and reached a consensus on key issues, which triggered a new wave of global risk of risk and undermined the price of gold as a safe refuge.
- The US dollar remains stable about a maximum of one month in the middle of the aggressive signal of the Federal Reserve that it is not inclined to cut interest rates in the short term, while the operators expect more details about the commercial agreement between the US and China.
- The Vice Primer Minister of China, He Lifeng, said that a joint statement in Geneva will be published on Monday, and that it will be great news and good news for the world, which adds even more to the optimism of the recent market.
- The Russian president, Vladimir Putin, has agreed to hold direct conversations with his Ukrainian counterpart, Volodymyr Zelenskyy, and declared that these conversations should begin “without previous conditions and without delay” on Thursday, May 15.
- Meanwhile, Hamas said that the last American hostage in Gaza, Edan Alexander, will be released and confirmed plans to hold direct conversations with the US as part of the efforts to reach a high fire and resume the delivery of help.
- The operators this week will face the publication of the US inflation figures in addition to this, the appearance of the president of the Fed, Jerome Powell, on Thursday will be observed in search of clues on the future path of feat cuts and a new impulse.
The Gold Price Technical Technical Configuration supports the prospects of a movement towards the re-provite on the monthly minimum, around the 3,200 $ brand
From a technical perspective, any intradic rupture and acceptance below the confluence of 3,295-3.290 $-which includes the exponential mobile average (EMA) of 100 periods in the 4-hour graph and the Fibonacci recoil level of 61.8% of the recent amount ascending from the monthly minimum-could be seen as a key trigger for the bearish operators. In addition, the oscillators in schedules have been gaining negative traction and support the prospects of a new intra-denial movement for the price of gold. Some follow-up sales below the minimum of the Asian session, around the region of 3,253-3.252 $, will reaffirm the bearish bias and expose the monthly minimum, around the 3,200 $ mark. The latter should act as a pivotal point, which, if it breaks decisively, should pave the path for the resumption of the previous recoil drop from the psychological brand of 3,500 $, or the historical maximum achieved in April.
On the contrary, any recovery above the round figure of $ 3,300 seems to attract new sellers near the area of 3,317-3.318, or the maximum of the Asian session. However, a sustained strength could trigger a short coverage movement and raise the price of gold to the obstacle of 3,345-3.347 $, which represents the level of 38.2% of Fibonacci. This is followed by the static obstacle of 3,360-3.365 $, which, if it exceeds decisively, would cancel the negative bias in the short term and lay the foundations for a movement towards recovering the 3,400 $ mark.
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.
