- The Xau/EUR reached a historical maximum of € 3,035.
- The price of the ounce of gold in euros falls to minimum this week by € 2,892.47.
- Moderation in the US rhetoric with respect to China and the president of the Fed, improves the feeling of the market, weighing on the price of gold.
The price of the ounce of gold in euros falls this Wednesday after reaching Tuesday a historical maximum in € 3,035. The Xau/EUR has fallen today from a daily maximum in the Asian opening of 2,968.74 to a minimum of three days at € 2,892.47 At the beginning of the European session.
The Xau/EUR quotes at the time of writing about € 2,961.90, losing 0.48% in what we have been working on.
Moderation in Donald Trump’s comments about Jerome Powell and China cause a backward in the price of gold
He President of the United States, Donald Trumphe calmed the markets late on Tuesday, when he appeared at a press conference to ensure that It has no intention of saying goodbye to the president of the Fed, Jerome Powell. “The press rushes with things. No, I have no intention of saying goodbye. I would like to see it a little more active in its idea of lowering interest rates.”
On the other hand, Trump also pointed out that conversations with China are going well, adding that he believes that they will reach an agreement, with not 145% tariffs but not 0%.
The words of the US president generated a wave of momentary calm in the markets, leading to gold to close with losses of 0.48% against the euro after reaching its highest level of all time hours before.
Xau/EUR Price levels
The correction can be extended in the short term, according to the relative force index (RSI) of 14. In the long term, the RSI points down but remaining firm above 50, indicating that the upward trend is strong in larger time graphics.
In case of extending the fall below today’s minimum by € 2,892, the pair will seek support on the floor last week in € 2,810. Below 2,800 there is room to fall around € 2,698, where is the mobile average of 100 periods in daily graphic.
Upload, the first resistance appears in the mobile average of 100 periods in one -hour graph at € 2,944. Above, the main barrier is in € 3,035, record level reached yesterday.
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.
