- The price of gold attracts some sellers for the second straight day in the middle of the recession of the safe demanding.
- A stronger USD further reflects the pressure on the commodity amidst the signs of avoiding trading tensions.
- The Fed Rate Cut Bets can cap the USD and lend some non-harvesting yellow metal support.
The Gold Price (XAU/USD) is trading with a negative bias for the second consecutive day, even though it lacks convincing and holds more than $ 3,300 marks at the Asian session on Wednesday. The global equity market continues to rise amidst the signs of avoiding US-China trade tensions and US President Donald Trump's decision to provide flexibility to tariffs on US manufacturers. This, along with a moderate US dollar (USD) uptick, is seen as a major factor that slows down demand for safe precious metal.
Meanwhile, Trump's rapid shift in trading policies was received weakly by investors and led to a mass pivot far from US properties recently. Adding to this, the prospects for the more aggressive policy easing of the Federal Reserve (FED), amid higher concerns over the economic impact of tariffs, can continue to act as a headwind for USD. In turn, lends some price support that does not produce gold and helps limit the downside, guarantee some precautions for bearish entrepreneurs.
Daily Digest Market Movers: The price of gold is forced by a combination of factors; The potential downside seems limited
- President Donald Trump signed an order on Tuesday to alleviate tariff effects on the auto industry, providing carmakers for two years to increase the domestic components of US-developed vehicles. This increases in optimization of development in trade negotiations and signs of potential de-escalation of US-China trade tensions.
- The US dollar attracts some consumers for the second straight day and also acts as a headwind for the price of gold. Investors, however, remain on the side as Trump's false trade policies continue to remember about a sharp slowdown of the economy. Moreover, the bets that the Federal Reserve will continue the rate of cutting rate soon should ride any significant USD upside down.
- Dovish Fed's expectations have been re -proven by failures in opening work in the US and Labor Turnover Survey (Jolts) and the US Conference Conference Index released on Tuesday. In fact, the US Bureau of Labor Statistics (BLS) reported that the US job opening fell 7.19 million on the last day of March from 7.480 million last month.
- Adding to this, the US Consumer confidence index fell to 86.0 in April, or nearly five low -year -olds. Moreover, the current index of the situation and the expectations index dropped to 133.5 and 54.4, respectively, in the reported months. The data strengthens the case for more aggressive Fed easing policy and should support non-yielding yellow metal.
- In the geopolitical front, Russia has removed Ukraine's proposal to extend Russian unilateral president Vladimir Putin to a three-day stop in 30 days. In addition, the US threatened to stop efforts to end the conflict between Russia and Ukraine if both parties did not deliver concrete measures. This further contributes to limiting the downside for the XAU/USD pair.
- Businessors now look at the docket of Economic Wednesday-featuring an ADP report in the private sector work, the advance Q1 GDP print, and the price index of personal consumption and cost (PCE). This, along with the US Nonfarm Payroll report on Friday, should provide clues about the Fed policy perspective and influence the commodity in the near term.
The price of gold can continue to show stability below 38.2% FIBO. and attract dip-buyers below $ 3,300 mark
The technical indicators in the sun -day chart are held comfortably in positive territory and favors the XAU/USD Bulls. Therefore, any additional weakness below the $ 3,300-3,290 immediate support, which represents the 38.2% Fibonacci Retracement Level of the latest leg from around the mid-$ 2,900So the monthly swing low, can continue to find decent support near the $ 3,265-3,260 zone. A convincing rest under the latter, however, will set the stage for an extension of the recent pullback from the all-time peak that was touched last week. The descending trajectory can then drag the price of gold to the 50% level of retirement, around the $ 3,225 region, the route to the $ 3,200 mark.
On the flip side, the Asian session highly, around $ 3,328 regions, could act as an immediate obstruction to the fore $ 3,348-3,353 area. This is followed by a $ 3,366-3,368 supply zone, which if cleared should allow the price of gold to recover the $ 3,400 mark. The momentum could further extend to the $ 3,425-3,427 intermediate hurdle before the bulls made a fresh attempt to conquer the $ 3,500 psychological mark.
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.
