- Gold prices are less as they choose bulls to reduce their bets before FOMC minutes.
- It supports concerns about Trump’s tariff plans and fears of the commodity’s trade war.
- The federal reserve rates are undermined the USD dollar and acts as the back wind of Xau/USD.
The price of gold (Xau/USD) attracts some sellers during the Asian session on Wednesday and leads to the erosion of part of the strong move the day before to the highest height of the record. The decrease can be attributed to some profits amid a general risk tone, which tends to undermine the demand for safe alloys. However, the uncertainty surrounding US President Donald Trump’s tariff plans may still serve as the back wind of precious metals.
Meanwhile, the expectations that the Federal Reserve (Fed) may reduce interest rates this year, which are strengthened by a sudden decrease in US retail sales, failing to help the US dollar (USD) to benefit from modest gains on Tuesday. This must contribute to reducing any meaningful segment of the price of gold. Traders may choose to wait for the FOMC meeting minutes to get signals about the price blocking path before putting the directional bets around the non -returning yellow metal.
The bulls in gold prices turn into caution amid a positive risk tone, before the FOMC meetings
- The optimism about the delay in implementing the definitions and mutual talks of US President Donald Trump, which aims to end Russia’s and lengthy war, some profits about the price of gold on Wednesday.
- Investors are still concerned about a possible escalation in global trade tensions against the backdrop of Trump’s protectionist policies. This, in addition to betting to further reduce policy by the federal reserve, supports safe alloys.
- The disappointing version of US retail sales numbers on Friday, as well as mixed signals on inflation, indicates that the US Central Bank can reduce interest rates at the monetary policy meeting in September or October.
- In fact, futures for the Federal Reserve sees the possibility of reducing the average of 40 basis points by the end of this year. This maintains a cover on the US dollar (USD) from its lowest level in two months and should support Xau/USD.
- Mary Dali, head of the Federal Reserve in San Francisco, said on Tuesday that the US Central Bank must retain short -term borrowing costs as this is until the progress towards achieving the goal of inflation by 2 % is more clear.
- Consequently, the market focus will remain on issuing the minutes of the Federal Reserve meetings in January, which will be considered in search of evidence about the interest rate of the central bank and its impact on the non -fortified yellow metal.
The technical preparation for gold prices supports prospects for the emergence of a decline in less than $ 2,925
From a technical perspective, the extent -related price procedure may still be ranked as a bullish unification phase against the background of the last strong action to the peak at all. However, the RSI is still close to the peak purchase area and supports the possibility of extending the autistic price step. However, the preparation remains inclined in favor of bulls and indicates that a less resistant path for Xau/USD remains to the upward trend.
Meanwhile, it is likely to find weakness without an area of $ 2925 some support near the $ 2900 brand before the 27,878-287-287 trading area or the lower limits of the short-term trading range. A convincing break to the last of the last can pull the price of gold to the 2860-2,855 dollar area on its way to the $ 2,834 region. Failure to defend the aforementioned support levels may lead to some technical selling and Xau/USD withdrawing towards a $ 2,815 region on its way to a brand of $ 2800 and a 2785-2784 dollar area.
On the other hand, the 2940-2,942 dollar area may last, or the record that was touched earlier this month, at work as an immediate strong barrier. Some follow -up purchase will be seen as a new operator for budget merchants and pave the way for an extension of a firm rise that has witnessed during the past two months or so.
Common Gold questions
Gold played a major role in human history, as it was widely used as a store for value and exchange. Currently, regardless of its brilliance and use of jewelry, the precious metal is widely seen as a safe asset, which means it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against currency decline because it does not depend on any specific source or government.
Central banks are the largest gold holders. In their goal to support their currencies at troubled times, central banks tend to diversify their reserves and buy gold to improve the powerful power and currency. High gold reserves can be a source of confidence to the dissolved country. Central banks added 1136 tons of gold worth $ 70 billion to their reserves in 2022, according to the data of the Golden Golden Council. This is the highest annual purchase since the start of the records. Central banks of emerging economies such as China, India and Turkey increase their gold reserves.
Gold has a counter -relationship with the US dollar and the United States Treasury, which is one of the main reserves and safe assets. When the dollar decreases, gold tends to rise, allowing investors and central banks to diversify their assets at turbulent times. Gold is inversely associated with the origins of the risk. The assembly in the stock market weakens the price of gold, while sales in the most dangerous markets tend to prefer precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of deep stagnation can escalate the price of gold due to its safe situation. As a lower asset than the return, gold tends to rise with low interest rates, while the high cost of money usually reaches the yellow metal. However, most moves depend on how the US dollar (USD) is behaved as the original is priced in dollars (Xau/USD). The strong dollar tends to maintain the price of gold -controlled gold, while the weakest dollar is likely to increase the price of gold.