- The purchase of gold continues incessantly while commercial uncertainties continue to boost the demand for safe refuge.
- The geopolitical risks and Trump’s threat to the independence of the Fed further benefit from the Xau/USD torque.
- The bulls seem not to be affected by the extreme overstarle conditions in the short -term graph in the middle of a weaker USD.
The price of gold (Xau/USD) is based on the impulse of rupture of the previous day beyond the 3,400 $ brand and continues to reach new historical maximums during the Asian session on Tuesday. The fears that the tariffs of US President Donald Trump and the growing commercial war between the US and China may affect global economic growth continue to boost the demand for the traditional precious metal of safe refuge. Apart from this, the recent fall of the US dollar (USD) at a minimum of three years turns out to be another factor that feeds the strong ascending movement of precious metal.
Trump’s changing tariff ads have weakened investor confidence in the US economy. In addition, Trump’s new attack on the president of the Federal Reserve (FED), Jerome Powell, has generated doubts about the independence of the Central Bank. This, together with the prospects for a more aggressive policy relief by the Fed, keeps the USD’s bulls on the defensive and provides an additional impulse to the price of gold. However, extreme overwhelming conditions in short -term graphics justify the caution before opening new bullish positions around the Xau/USD torque.
What moves the market today: the price of gold continues to attract safe refuge flows amid concerns about the economic deceleration driven by tariff
- The uncertainty about the high tariffs of US President Donald Trump and its impact on the global economy continues to push the price of safe refuge to new historical maximums on Tuesday.
- In addition, Trump’s rapid changing position on commercial policies, along with a call to fire the president of the Federal Reserve, Jerome Powell, keeps investors in vilo and further benefits the merchandise.
- Trump accused Powell not to act quick enough to reduce interest rates. In addition, Trump and his team are studying if they can dismiss Powell before the end of his mandate.
- This generates doubts about the independence of the Fed monetary policy, which, together with the bets that the US Central Bank will resume its cycle of feat cuts, continues to weigh on the US dollar.
- According to the CME Group Fedwatch tool, operators are valuing the possibility that the FED reduces interest rates at 25 basic points in June and make at least three rates cuts in 2025.
- In the geopolitical front, the Russian forces launched 96 drones and three missiles in the east and south of Ukraine after the high Easter fire, which lasted 30 hours and was partially observed.
- The operators now expect the publication of the US Richmond Manufacturing Index, which, together with the Speeches of FOMC’s influential members, will boost USD’s demand.
- However, the approach will continue in the preliminary PMIS on Wednesday, which will offer new perspectives on global economic health and provide significant impulse to the Xau/USD couple.
The overcompra conditions of the price of gold make it prudent to expect a short -term consolidation or a modest setback before the next rise
From a technical perspective, the Daily Relative Force Index (RSI) is maintained well above the 70th brand and justifies caution for the bullies. Therefore, it will be prudent to expect some short -term consolidation or a modest setback before opening new upward positions around the price of gold and positioning itself for an extension of the well -established bullish trend that has been observed during the last four months approximately.
Meanwhile, any significant corrective fall is likely to find a good support near the horizontal zone of 3,425-3,423 $ before the $ 3,400 mark. A convincing rupture below the latter could cause some technical sales and drag the price of gold even more towards the region of 3,358-3.357 $. This is followed by the $ 3,344 support, which if it breaks decisively should pave the path for deeper losses.
Commercial War between the US and China Faqs
In general terms, “Trade War” is a commercial war, an economic conflict between two or more countries due to the extreme protectionism of one of the parties. It implies the creation of commercial barriers, such as tariffs, which are in counterbarreras, increasing import costs and, therefore, the cost of life.
An economic conflict between the United States (USA) and China began in early 2018, when President Donald Trump established commercial barriers against China, claiming unfair commercial practices and theft of intellectual property by the Asian giant. China took retaliation measures, imposing tariffs on multiple American products, such as cars and soybeans. The tensions climbed until the two countries signed the Phase one trade agreement between the US and China in January 2020. The agreement required structural reforms and other changes in China’s economic and commercial regime and intended to restore stability and confidence between the two nations. Coronavirus pandemia diverted the attention of the conflict. However, it is worth mentioning that President Joe Biden, who took office after Trump, kept the tariffs and even added some additional encumbrances.
Donald Trump’s return to the White House as the 47th US president has unleashed a new wave of tensions between the two countries. During the 2024 election campaign, Trump promised to impose 60% tariff particularly in investment, and directly feeding the inflation of the consumer price index.
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.
