- The price of gold increases to around $ 3,245 during the Asian session on Thursday, down 1.25% over the day.
- Dé-escalation in trade tensions and a firmer US dollar on the price of gold.
- Friday, the job report in American April will be closely monitored.
The price of gold (XAU / USD) extends the decline to around $ 3,245 during the first Asian session on Thursday. The precious metal edges lower up to a two-week hollow in the middle of American-Chinese trade tensions and the stronger demand for the US dollar (USD).
The feeling of risks improves after the American president Donald Trump signed a decree on Tuesday to soften prices on foreign automobile parts, granting manufacturers of two years to increase the internal supply. In addition, the secretary in the United States of the Treasury, Scott Bessent, underlined the “very good” offers of business partners.
US trade representative Jamieson Greer said on Wednesday evening that the administration of US President Donald Trump was planning to conclude initial tariff agreements with certain American trade partners in a few weeks. Optimism surrounding the prices raises the greenback and weakens the demand for traditional package assets like gold because it makes the yellow metal more expensive for holders of other currencies.
On the other hand, hopes for reducing rates of the American Federal Reserve (Fed) after lower than American economic data for the United States could help limit the losses of yellow metal. The US economy contracted at an annualized rate of 0.3% in the first quarter (T1) of 2025, according to the US trade department. This figure came lower than the 0.4% estimate and more from the previous reading of an expansion of 2.4%.
The term contracts see the decreases in the Fed departure rate in June, with a total of four reductions of four points expected, which reduces the rate to the band of 3.25% to 3.50% by the end of the year. Investors will closely watch the job data in April in the United States on Friday for a new momentum. The PNF is expected to display 130,000 additions of jobs in April, while the unemployment rate should remain at 4.2%.
FAQ GOLD
Gold played a key role in the history of man because it was widely used as a reserve of value and means of exchange. Currently, apart from its shine and its use for jewelry, precious metal is largely considered as an asset in Houmle, which means that it is considered a good investment at the turbulent time. Gold is also widely considered as coverage against inflation and the depreciation of currencies because it was not based on a specific transmitter or government.
Central banks are the biggest gold holders. In their objective of supporting their currencies at the turbulent time, central banks tend to diversify their reserves and buy gold to improve the perceived force of the economy and money. High gold reserves can be a source of confidence for the solvency of a country. The central banks added 1,136 tonnes of gold worth around $ 70 billion to their reserves in 2022, according to World Gold Council data. This is the highest annual purchase since the start of the files. The central banks of emerging savings such as China, India and Turkey quickly increase their gold reserves.
Gold has an opposite correlation with the US dollar and American treasury vouchers, which are both the main security and security assets. When the dollar depreciates, gold tends to increase, allowing investors and central banks to diversify their assets on turbulent times. Gold is also inversely correlated with risk assets. A stock exchange on the stock market tends to weaken the price of gold, while sales in the risky markets tend to promote precious metal.
The price can evolve due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly degenerate gold prices because of its security status. As an without efficiency, gold tends to increase with lower interest rates, while the cost of higher silver generally weighs the yellow metal. However, most movements depend on how the US dollar (USD) behaves as the asset is assessed in dollars (XAU / USD). A strong dollar tends to maintain the price of controlled gold, while a lower dollar is likely to raise gold prices.
