- The United States Labor Report reduces NFP expectations to reduce the federal reserve rate, which prompted Xau/USD prices.
- The US dollar is receiving a batch of Tensions of the United States of China and the best American recruitment data expected on Friday, for gold gains.
- Gold prices threaten channel support with psychological resistance at $ 3,350.
gold Prices extend to losses against the US dollar (USD) on Friday, as it decreased without previous psychological support, and now the resistance, at $ 3350, after the US salary report in the United States (NFP) showed a flexible labor market.
A week after the data indicating the softening of the American labor market, the NGP report was surprised for the month of May on the upward trend. The US economy added 139,000 new jobs, overcoming analysts’ expectations, an increase of 130,000.
Meanwhile, the unemployment rate remained unchanged at 4.2 %, providing a mixed vision but more optimistic about the conditions of the labor market. The main number of the stronger is expected to be a temporary rest to the US dollar, which reduces fears that Federal Reserve (Fed) You may need to act quickly with price cuts. However, the basic softness in other recruitment measures earlier this week still guarantees caution in the broader policy Expectations.
According to the CME Fedwatch tool, the possibility of the July rate decreased sharply to 16.5 %, a decrease from 33.9 % before the release. The data temporarily reduced the pressure on the Federal Reserve to work quickly, indicating that policy makers may take care of a more sick situation in the short term.
Trade and tariff developments continue to influence gold prices
Although the phone call on Thursday between Chinese and American presidents helped alleviate immediate concerns of the escalating trade war, the uncertainty and broader trade tensions are still a major concern for global investors.
The US decision to double the tariffs on steel and aluminum imports led to 50 %, which was imposed on Wednesday, sharp criticism of the main commercial partners, including India, Canada, the European Union and Mexico, all of them threatened reprisals.
With the expectation that commercial negotiations will continue next week, the danger of long conflicts is waving on the horizon. If the talks collapsed or rising tensions, the global economy may face renewable opposite winds, which may weaken stock markets and pay demand for safe assets such as gold.
Gold Daily Digest: Commercial conversations, interest rates and economic expectations
- Continuous commercial discussions between the United States and China provide additional winds for gold prices, while continuing to focus on commercial conversations.
- After the positive phone call between US President Donald Trump and Chinese President Xi Jinping on Thursday, they agreed to restart high -level economic conversations. The agenda includes a solution to customs tariffs and improve relationships, but there are doubts between investors about the amount of progress that will be made.
- The economic data issued by the eurozone on Friday shows that GDP has exceeded the expectations of the analysts for the first quarter on a monthly and annual basis. GDP grown 0.6 % QOQ, exceeding 0.4 % estimates. YOY numbers showed a rise of 1.5 %, which was also above 1.2 % estimated.
- Retail sales in the euro area increased by 2.3 % on an annual basis, higher than 1.4 % higher, while monthly reading was in line with 0.1 % increase expectations.
- On Thursday, the European Central Bank (ECB) reduced the interest rate by 25 basis points (BPS), a step that was already priced on the market. European Central Bank President Christine Lagarde has suggested that the price that falls in prices may approach its end in the short term.
- According to the CME Fedwatch tool, market participants expect the Federal Reserve to leave interest rates unchanged in a range of 4.25 % to 4.50 % at the June 18 meeting.
- The ADP recruitment report, which was issued on Wednesday, was disappointed on the negative side, as the private sector added 37,000 jobs in May, less than analysts’ expectations of 115,000.
- On Thursday, the statements of the unemployed claims submitted signs of a slowdown in the strength of the labor situation in the United States, with the rise in preliminary claims to 247,000 last week, above estimates from the increase of 235,000.
Gold prices move below decisive psychological support at $ 3,350
Gold fell to less than the level of psychological support of $ 3350 on Friday, as prices test 3330 dollars at the time of this report. With the continued restrictions of prices to the narrow range that has been built over the past four days, the Whipsaw prices and the broader geopolitical developments make gold prices vulnerable to any basic transformations that may affect the trend of prices next week.
With a level of $ 3350 that now provides resistance in the short term, the short -term support is seen at the psychological level of $ 3300, and the simple moving average is settled for 20 days (SMA) at $ 3,291.
The decline in prices also led to a decrease in the RSI index, with a reading of 52, indicating that the bulls may lose steam.
In order for the bullish trend to prevail, the step exceeding $ 3,350 and above 3,370 dollars, which provided resistance to Friday’s step, can witness the price recovery, and thus restore the psychological level of $ 3400 to play.
Daily golden graph
As for the bullish movement, the price of gold has some technical obstacles that must be wiped. Inventory the level of resistance of $ 3,392, the biological capabilities throughout the week, followed by the psychological level of $ 3400. If the bulls wipe this area and the bullish momentum gains traction, the transition may be about April at all at 3500 dollars as possible.
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.
