- Gold falls to $ 3.182 in the middle of the commercial truce with China and the decrease in the demand for safe refuge.
- DXY descends around 100.60 while the disappointment of the CPI renews speculation about feat cuts.
- The Fed is expected to maintain stable rates during the summer, with the first cut expected for September.
The US dollar index (DXY), which measures the value of the US dollar in front of a foreign exchange basket, weakened about 100.60 on Wednesday, since the lowest inflation is lower than expected and the news about the ongoing discussions on the currency between the US and South Korea pressed the dollar. Gold extended its mass sale, falling below $ 3,200 per ounce for the first time since April 11.
A pause in the demand of ETF in China and a positive geopolitical feeling, which includes diplomacy in the Middle East and commercial optimism with Asia, triggered a broader change towards more risky assets. Meanwhile, yields in the US increased, undermining the attractiveness of gold without performance despite the weakness of the USD. The operators now look towards the PPI data and retail sales later in the week to obtain more clues about the next movement of the Fed.
Daily summary of market movements: where there is smoke …
- The gold breaks below $ 3,200 per ounce for the first time since April 11, driven by an improvement in appetite for risk and bass graphic patterns.
- Xau/USD reached $ 3,182 as ETF flows stopped in China and optimism about US commercial conversations with Japan and South Korea weighed on safe shelters.
- The US CPI for April was soft, with a general inflation of 2.3% year -on -year, below expectations, and the stable underlying inflation in 2.8%.
- Jefferson of the Fed said that progress in inflation continues, but the perspective has become uncertain due to possible crashes due to import tariffs.
- The Vice President of the Fed reiterates patience, reducing the probability of three rate cuts in 2025, with the markets now valuing only two.
- The yields of the 10 -year Treasury bonds of the US rose despite soft inflation, reflecting caution on long -term debt stability.
- The preference of the Trump administration for a weaker USD is generating speculation about exchange pressures on the partners.
- Dxy gives the profits after the agreement with China, now contributing about 100.60 after fading the bullish impulse and returning the bassist appetite.
- The demand for central and institutional banks can provide downward protection for gold, but the impulse favors a greater setback.
- Positive holders about Russia and Ukraine and US diplomacy in the Middle East continue to support a broader tone of risk.
- The currency markets react to reports on exchange rate conversations between the US and South Korea, triggering pressure on the dollar.
- Market expectations now show a 49.9% probability of a Fed rates cut in September, with rates seen about 3.25% -3.50% by the end of 2026.
Technical analysis of the US dollar index: bassists have returned
The DXY is exhibiting a bearish signal, quoting about 101.00 with minor losses in the day. The price action is currently in an average range between the minimum and maximum of the 100.27 and 101.02 session, respectively. The Relative Force Index (RSI) is close to level 50, reflecting a neutral impulse, while the convergence/divergence indicator of mobile socks (MACD) shows underlying purchasing pressure.
The Stochastic Relative Force Index (fast) remains elevated in the 80s, and the ultimate oscillator is located in the 50s, both suggesting neutral dynamics. The bullish and bassist power indicator is around 0, hinting at a slight seller bias. While the single mobile average (SMA) indicates some upward potential, the exponential mobile socks (EMA) of 30 and 50 days, together with the SMA of 100 and 200 days, all tend to be bassists. The key support levels are observed at 100.68, 100.51 and 100.50, while resistance levels are located at 100.91, 101.42 and 101.87.
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.
