- In early European sessions on Friday, the edge of gold prices is low and pressure is put on profits.
- Increasing uncertainty about tariffs and the fear of recession could increase the flow of safe havens that supports gold prices.
- Fed’s Daly will speak later Friday.
gold Price (Xau/USD) is stable on Friday after investors retreated from an all-time high of $3,358 as they book profits over the long Easter weekend. Serious uncertainty and ongoing geopolitical tensions over US imports and US President Donald Trump’s tariffs could support gold prices known as safe shelter assets.
Meanwhile, the Federal Reserve Chairman Jerome Powell It has reduced the possibility of a reduction in Fed rates in June and has become a Hawkish. This could raise the greenback and weigh the religious product prices of the US dollar. Powell said the weakness of the economy and high inflation could contradict the Fed’s goals and allow for a stag scenario. Federal Reserve’s Mary Daly will speak later Friday. Trade volumes may be reduced on Good Friday.
Gold prices will be lower on Good Friday
- Lukman Otunuga, senior research analyst at online trading broker FXTM, said:
- According to the U.S. Department of Labor (DOL) on Thursday, the first US unemployment claims fell to 215K for the week ending April 12. This figure was below the initial estimate and was lower than the previous week at 224K (revised from 223K).
- Continued unemployment claims for the week ending April 5th rose to 1.885m, up 41K from 1.844m (revised from 1.85m).
- US buildings rose 1.6% in March to 1482 million, surpassing the 1.45 million estimate. Meanwhile, housing starts in March fell from 1.494m in February to 1.324m (revised from 1.501m).
- According to the CME FedWatch tool, money market traders are selling 86 bps Fed rate cuts by the end of 2025, with the first cut expected in July.
A bullish bias in gold price remains, over-acquired RSI must pay attention to bulls
Gold prices will be traded on flat notes on the day. The precious metals maintain a bullish atmosphere in the daily time frame, characterized by prices above the 100-day index moving average. Nevertheless, the 14-day relative strength index (RSI) moves beyond the 70.00 mark, indicating the terms of the acquisition, and guarantees some attention. This suggests that further consolidation or temporary sale is on the card.
On the bright side, the immediate resistance level for viewing is $3,355, which is the upper limit of Bollinger Bands. A sustained transaction beyond the above levels could pave the way for a psychological level of $3,400.
For bearish, the April 18th lowest is $3,230, serving as the initial support level for Xau/USD. Further south, the next competition level is $3,105, the lowest on April 2nd.
Gold FAQ
Gold has played an important role in human history as it is widely used as a medium of value and exchange. Apart from the gem’s brilliance and usage, precious metals are now widely viewed as safe haven assets. In other words, it is considered a good investment in times of turbulence. Gold is also widely viewed as a hedge against inflation and depreciation currencies, as it is not dependent on a particular issuer or government.
The central bank is the largest holder of money. With the aim of supporting currency in turbulent times, central banks tend to buy gold to diversify reserves and improve the perceived strength of the economy and currency. High gold reserves provide a source of trust in the country’s solvency. The central bank added 1,136 tonnes of gold to its bookings in 2022, worth around $70 billion, according to data from the World Gold Council. This is the best purchase every year since the record began. Central banks in emerging economies such as China, India and Türkiye are rapidly increasing their gold reserves.
Gold is inversely correlated with the US dollar and the US Treasury, both major reserve assets and safe haven assets. As the dollar depreciates, gold tends to rise, allowing investors and central banks to diversify their assets during turbulence. Gold is also inversely correlated with risk assets. While rallies in the stock market tend to weaken gold prices, selling in high-risk markets tends to favor valuable metals.
A wide range of factors allow prices to move. The fear of geopolitical instability or deep recession can quickly escalate gold prices due to their safe conditions. As an asset that does not yield, gold tends to rise at lower interest rates, but the cost of higher money usually weighs the yellow metal. Still, most movements depend on how the US dollar (USD) behaves, as the asset’s price is in dollars (Xau/USD). Strong dollars tend to keep the price of gold down, while weaker dollars can push the price of gold up.
