The price of gold in euros rebounded to maximum twelve days in € 2,855 in the early hours of Tuesday after the United States government will announce that it delayed the application of tariffs to August 1. The concern has been moderating in the last hours, since the European Union and the US are expected to reach an agreement during this week, which has caused a price setback, registering losses in the day.
After closing yesterday at € 2,850, winning 0.64% daily, The Xau/EUR has shot at the Asian opening today to € 2,855, its highest level since June 26. Subsequently, the crossing has been giving ground, until it falls at a European noon to a daily minimum of € 2,828.
He Gold ounce price in euros at the time of writing is € 2,831.39, losing 0.67% in what we have been.
From one year to this part, the Xau/EUR has risen 29.18%.
The hopes of agreement between the European Union and the United States weigh on gold and drive the euro
- The European Commission reported Monday that it is advancing towards a principle according to the United States, and that next Friday the Member States will be consulted for approval. The entity reported that its president, Ursula von der Leyen, maintained a phone call with Donald Trump on Sunday to deal with aspects of the pact. Meanwhile, the US Secretary of Commerce, Howard Lutnick, reported yesterday that reciprocal tariffs will not take effect until August 1, expanding the deadline to reach agreements. Gold initially rebounded with this news, but the Hope of an announcement this week between Europe and the United States has given impulse to the euro in recent hours.
- Germany published its commercial balance, exports and imports on Tuesday, with mixed results. While the commercial balance extended its surplus at 18.4b of euros in May, above the 15.5b of euros planned, exports fell 1.4% monthly, accentuating the decrease of 0.2% estimated by the market. In any case, the figures were positively received for common currency.
- In Gaza, five Israeli soldiers died last night victims of an explosion In the north of the strip, While 13 Palestinians died in attacks by the Israeli army During the early hours of this Tuesday. For his part, Benjamín Netanyahu evaded the truce proposed by Trump with Hamas, ensuring that his country works closely with the US to “find countries that offer the Palestinians a better future.” The conflict in the Middle East limits the losses of gold.
GOLD – FREQUENT QUESTIONS
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.
