- Gold prices will rise at Asian session on Wednesday.
- Trade war concerns among investors benefit gold prices and increase the flow of safe havens.
- Investors will tighten up new home sales and FedSpeak equipment for the US January later Wednesday.
Gold Price (XAU/USD) recovers lost ground after reaching a week's low in the previous session. The uncertainty and continued fear of continuing instability over President Donald Trump's tariff plans provide some support to the traditional safe inventory asset of yellow metal.
Nevertheless, analysts believe Trump's plan for higher tariffs has raised inflation concerns in the US Federal Reserve (FED), and may persuade the US central bank to keep interest rates longer. Not there. This may cap the benefits of valuable metals, as higher interest rates undermine the appeal of non-Yielding Gold.
New US home sales in January will be released later Wednesday. Fed officials, including Raphael Bostic and Thomas Barkin, will also speak on the same day. On Friday, all eyes will be released on the US Personal Consumption Expense (PCE) – January Price Index.
Gold prices gain traction as the fear of a trade war continues
- Trump signed another executive order late Tuesday, signaling that the US Department of Commerce would launch an official “search” on the copper market.
- Later Monday, Trump said tariffs on Canadian and Mexican imports were “in the deadline,” despite efforts to tighten border security and stop the flow of fentanyl to the US on a Reuters basis ahead of the March 4 deadline. “As planned.”
- According to the conference committee, U.S. consumer confidence fell the most since August 2021, falling to 98.3 over 105.3 in February.
- Federal President Richmond Thomas Birkin said late Tuesday that he would follow a waiting approach on central bank rate policies.
- Dallas Federal President Rory Logan has said that in the medium term it is appropriate for the Fed to purchase more short-term securities than long-term securities, so that each Bloomberg portfolio can more rapidly reflect the structure of Treasury issuances. He said that.
Gold prices remain bullish despite being consolidated in the short term
Gold prices outweigh the day's rise. In recent years, precious metals remain covered in a narrow trading range. However, the bullish outlook for gold prices remains the same on the daily charts, with prices exceeding the 100-day index moving average (EMA). Additionally, the 14-day relative strength index (RSI) stands above the midline near 64.0, indicating the least resistance.
The highest ever $2,957 is like a nut that's hard to break through the Gold Bulls. An upside-down break from the above levels could set off a move to the next bullish level of $2,980, the Bollinger Band cap, towards a psychological level of $3,000.
For bearish, the February 25th lowest is $2,888, serving as the initial support level for yellow metal. An extended loss could pave the way to the lower limit of Bollinger Band, $2,795. The key competition level to watch is $2,718, a 100-day EMA.
FAD FAQ
US monetary policy is shaped by the Federal Reserve System. The Fed has two missions. To achieve price stability and promote full employment. The main tool to achieve these goals is adjusting interest rates. When prices rise rapidly and exceed the Fed's 2% target, interest rates rise and borrowing costs for the entire economy. This makes the US dollar (USD) stronger as the US is becoming a more attractive place. If inflation rates fall below 2% or unemployment rates are too high, the Fed may lower interest rates and encourage borrowing.
The Federal Reserve holds eight policy meetings per year, where the Federal Open Market Committee (FOMC) assesses the economic situation and makes monetary policy decisions. The FOMC has 12 federal officials. Seven members of the Governor's Committee, the president of the Federal Reserve Bank of New York, and four of the remaining 11 Regional Reserve Bank presidents will take part. .
In extreme circumstances, the Federal Reserve can rely on a policy called Quantitative Liberty (QE). QE is a process that dramatically increases the credit flow in the financial system where the Fed has been stuck. This is a non-standard policy measure used during a crisis or when inflation is very low. This was the weapon chosen by the Fed during the 2008 big money crisis. This includes the Fed printing more dollars and using them to purchase high-quality bonds from financial institutions. QE usually weakens the US dollar.
Quantitative tightening (QT) is the reverse process of QE, with the Federal Reserve halting the purchase of bonds from financial institutions and not reinves principal from mature bonds to buy new bonds. It is usually positive about the value of the US dollar.
