- Gold prices collect more than 1 % on Monday, as markets are a soft start to a week that will include the interest rate decision in the Federal Reserve.
- Trump’s geopolitical risks stimulate investors to return to gold.
- The bullish risks continue even when the feelings appear to tend to the negative side.
Gold (Xau/USD) rises by more than 1 % on Monday, as traders flee to safe assets after a weekend bus on the geopolitical front. The Houthi attack that struck Ben Gurion airport this week and promised Israel to take revenge while preparing for a widespread attack in Gaza, raising the risks again in the area. Meanwhile, US President Donald Trump said that military action may be an option to consider the United States to control Greenland.
Gold’s appeal is increasing as merchants are ready for the Federal Reserve Price on May 7. During the weekend, Trump has once again expressed his hatred from the Federal Reserve and its President Jerome Powell. After summoning Powell “harsh”, the US president called for members of the Federal Open Market Committee (FOMC) to Pullaman Powell to provide price cuts.
According to the Fedwatch tool at Chicago Mercantile Exchange (CME), there is no price reduction this on Wednesday. Given the printing of the last unconscious salaries and the latest series of data from sectors such as manufacturing and services, the American economy began to dilute, but it does not collapse. This ammunition may be for the President of the Federal Reserve Powell to push political pressure and the channel to the markets whose prices will remain constant for a longer period until the Federal Reserve becomes comfortable enough to reduce it ..
Daily Digest Market Movers: Closed on Monday
- Many Asian markets are closed to spend a public vacation on Monday. The UK is also closed.
- In the gold mining sector, some acquisition news with Road Gold resources corresponds to $ 3.7 billion after Fields Gold Fields in South Africa sweetened its offer, as it concluded a general paste between joint project partners, according to Financial Review reports.
- The CME Fedwatch tool shows the opportunity to reduce the interest rate by the Federal Reserve at the May meeting by 5.2 % against the possibility of no change of 94.6 %. The June meeting is witnessing a 46.6 % chance to reduce the rate.
Technical analysis of gold prices: promises made
The alloys rise to the top on Monday, while Greenback decreased at the beginning of the trading day. The communication ships between the two days come a few days before the Federal Reserve Average decision. In general, rates are fixed or higher for gold because the interests of interest in bonds are more attractive than the return of gold. However, there may be an outbreak in this narration: if the rates remain high at the current levels, the American economy may weaken more, correspond and lead to recession or recession, and gold is a better hedge in mode this scenario.
On the upper side, the R1 resistance was already broken at $ 3,265 in the upper test of early trading on Monday. If some follow -up comes, the R2 may be at a price of $ 3337 very far. Instead, search for $ 3,290 (1 May 1) and $ 3,320 (April 30 Right) as intermediate levels close to upward resistance.
On the downside, the axis should make $ 3,244 with the technical level at $ 3,245, and the trick should be done and kept. In the event of alloys, there is very close support near support between 3,219 dollars from the S1 and supported 3,197 dollars annually during the day on Monday.
Xau/USD: Daily chart
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.
