- Gold prices struggle to achieve weekly acquisitions registered over the past two days.
- Optimism in US-China's trade talks is seen weighing in safe goods.
- Investors are now looking at the very important decision of the FOMC policy for a fresh Impetus direction.
The Gold Price (XAU/USD) retreated strongly from a two-week high touched the previous day while announcing US-China's trade talks in Switzerland this week has increased the confidence of investors and overthrows the traditional safe property. Meanwhile, some trading repositions in advance of Key Central Bank risks help the US dollar (USD) to attract some consumers following a three-day losing stripe, conducting additional pressure on the commodity.
The USD Bulls, however, seem reluctant to put aggressive bets and choose to wait more clues about the Federal Reserve's (FED) rate-cut path. This, with the ongoing geopolitical risks that come from the protected war of Russia-Ukraine and conflicts in the Middle East, should act as a tail for the price of gold. Therefore, it is important to wait for the outcome of the long -awaited two -day FOMC financial policy policy later this Wednesday.
Daily -Sales Digest Market Movers: The price of gold is forced by a combination of factors while traders are far from decision
- US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer are set to address their Chinese counterparts in Switzerland on Saturday to discuss trade and economic issues. It has marked the first direct communication since the US imposed tariffs in China and one step towards resolving a trade war between the two largest economies in the world.
- Meanwhile, US president Donald Trump said on Tuesday that he and the leading administration officials would review potential trade deals in the next two weeks to decide which one to accept. However, this, the counters of Trump's earlier statement that his administration could express trade dealings in some countries at the moment.
- In addition, Trump announced 100% tariffs on movies made outside the US and also indicated that he plans to express fresh tariffs on pharmaceutical imports over the next two weeks. It keeps investors on the side and can continue to act as a tail for the safe price of gold amid increased geopolitical risks.
- A Kremlin spokesperson said Russia would remain in its plans for a unilaterally imposed stop between 8 and 11 May but warned that an appropriate response would be given immediately if Ukraine did not stop the fire. Meanwhile, Russia and Ukraine exchanged 205 war inmates each with an exchange combined with the United Arab Emirates.
- Israel's security cabinet united approved a plan to expand the military offensive in Gaza. The plan involves the Israel Defense Forces (IDF) that invades and gradually seized Gaza's territorial control. Although no formal detail was announced, officials said the operation would not begin until Trump's visit to the Middle East next week.
- Investors are diligently awaiting the federal reserve decision later this Wednesday. The accompanying financial policy statement and Fed Chair's comments Jerome Powell at the post-meeting press conference will be reviewed for clues about the future rate-cut path. This will drive away the request of the US dollar and influence non-harvesting yellow metal.
Gold technical setup prices favors bulls and support prospects for the emergence of sink-selling at lower levels
From a technical point of view, the overnight long breakout by $ 3,360-3,365 horizontal barriers and a subsequent move beyond the $ 3,400 mark was seen as a fresh trigger for bulls. Moreover, the oscillators in the sun -the -day chart are held comfortably in the positive territory, suggesting that the path of at least resistance for the price of gold is upside down. However, the strong uprising has been witnessed since the beginning of this week approached $ 3,430-3,435 resistance. Such a place should now act as a pivotal point, above which the XAU/USD may aim to challenge all the peak that touched in April and conquer the $ 3,500 psychological mark.
On the flip side, the weakness below the $ 3,365-3,360 area can find some support near the $ 3,328-3,327 region leads to the $ 3,300 round figure. Failure to defend such a support level will neglect closely positive perspective and make the price of gold weak. The descending trajectory can drag the XAU/USD pair to $ 3,265- $ 3,260 intermediate route support to $ 3,223-3,222 regions and the last week's swing is low, around $ 3,200 neighborhoods.
Gold FAQs
Gold plays an important role in human history because it is widely used as a store of value and exchange medium. Currently, in addition to its brightness and use for jewelry, precious metal is widely seen as a safe property, which means it is considered a good investment during the chaotic period. Gold is widely seen as a fence against inflation and against the removal of money because it does not rely on any specific or government.
Central banks are the largest gold holder. With their goal to support their money in chaotic hours, the middle banks tend to vary their reserves and buy gold to improve the noticeable economic strength and the money. High gold reserves can be the source of trust for the solvency of a country. Central Banks added 1,136 tons of gold worth $ 70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest annual purchase since the notes began. Middle banks from emerging economies such as China, India and Turkey are rapidly increasing their gold reserves.
Gold has an opposite correlation with the US and US Treasury dollars, which is both major reserve and safe properties. When the dollar reduces, gold tends to rise, enabling investors and middle banks to vary their properties in turbulent times. Gold is also inversely linked to risk ownership. A rally in the stock market tends to weaken the price of gold, while sellers in the risk markets tend to favor precious metal.
The price can be moved due to a wide range of factors. Geopolitical instability or fear of a deep recession can rapidly increase the price of gold due to the status of the safe haven. As a small yield property, gold tends to rise with lower interest rates, while the higher cost of money usually weighs yellow metal. However, most moves depend on how the US dollar (USD) acts as the property is priced at the dollar (XAU/USD). A strong dollar tends to maintain the price of gold controlled, while a weaker dollar is likely to push gold prices.
