- As US dollars recovered slowly, gold prices have become in the New Year softly.
- FRB's interest -down observation and decrease in US Treasury yields may reduce further rise in US dollars.
- Relatulating concerns about the trade war may reduce the loss of the safety currency XAU/USD pair.
The gold price (XAU/USD) attracts a slight sale at the beginning of a new week, and is far from the highest value of $ 2,786 on Friday, that is, near the high price since late October. The US dollar (USD) recorded a gentle recovery after recording the worst week since November 2023, but it was found to be the main factor that damaged the commodity. Nevertheless, the basic background seems to be lean on bullish, supporting the prospect that some push buying will appear at a lower level.
Following the decision of US President Donald Trump to impose tariffs on all imports from Colombia, concerns about trade wars have recovered, and global risk centement has been hit. In addition, the Federal Preparatory Board (Fed) has a new decline in US Treasury yields, combining the possibility of declining twice by the end of this year and the escape of safety. This may help the US dollar bullish to be aggressive betting and to limit the significant lower prices of gold prices without yields.
Gold prices are squeezed by strong recovery in US dollar demand. The negative side looks limited
- In conjunction with US dollars against the currency basket, the US dollar rose nearly 0.25 % as U.S. President Donald Trump's concerns about trade policies, nearly 0.25 %, and promoted some sales near Monday gold prices.
- Following the Colombian government to land two US military aircraft on board, Trump has ordered the government to introduce 25 % emergency tariffs on all products from Colombia.
- President Trump warns that if the Latin American nations refuse to complain of immigration policy, raising tariffs to 50 % by next week, raising concerns about the trade war, increasing their willingness to investee investors in higher risks. He warned that it would be suppressed.
- The Wall Street Journal (WSJ) further reported that Trump's advisors have increased the opportunity to impose 25 % tariffs on Mexico and Canada on February 1 without waiting for negotiations or consultation.
- As the latest development, the White House confirmed on Monday that Colombia had agreed to all the conditions of President Trump, including unlimited acceptance of all illegal residents from Colombia, who returned from the United States.
- Meanwhile, President Trump said that it would require an immediate reduction of interest rates last Thursday, and the federal preparation system would further reduce borrowing costs in 2025, and US Treasury yields declined.
- This may be a headwind for US dollars, which can help reduce the lower value of XAU/USD, and it is necessary to pay some attention to some extent before confirming that the recent positive movement, which has been seen in the past month, has lost its momentum. 。
- Traders are currently looking for some stimuli in the second half of the US trading, including durable goods orders, consumer trust index, and Richmond Manufacturing Economy Index.
The gold price may be invited to buy a push around $ 2,736 in a bullish technical setting.
If it is below the $ 2,750 to 2,748 zone, there is a high possibility that support will be found near $ 2,736 in front of a strong resistance line of $ 2,725 to 2,720. The latter should function as an important important point, and if it collapses, it will promote technical selling, pushing the gold price to less than $ 2,700, and pushing it down for the next related support around $ 2,665 to 2,662. be.
Conversely, if the momentum exceeding the 2,772 to 2,773 dollars, the way to return to a record high of around $ 2,790 in October will open. Buying some follow -through, which leads to the strength exceeding the $ 2,800 mark, will be considered a new trigger for bullish traders and an extension of positive movements.
Frequently asked questions about gold
Since gold has been widely used as a value preservation and replacement medium, it has played an important role in human history. At present, apart from its glow and jewelry, precious metals are widely regarded as safe assets, which means that it is considered a good investment in a turbulent era. Gold is also widely seen as a hedge for inflation and currencies because it does not depend on a specific publisher or government.
Central Bank is the biggest gold holder. For the purpose of supporting its own currency in the era of confusion, the central bank tends to buy money to diversify foreign currency preparation and improve the recognition of economic and currency strength. High gold reserves can be a source of trust in national payments. According to data from the World Golden Council, the Central Bank added 1,136 tons of 1,136 tons worth in 2022 to reserves. This is the highest annual purchase amount since the recording began. Emerging countries such as China, India, and Turkey are rapidly increasing gold.
Gold is in reverse associations with US dollars and US Treasury bonds, which are the main assets and safety assets. When the dollar falls, gold tends to rise, and investors and central banks can diversify their assets during the turmoil. Money is inverted with risk assets. The rise in the stock market tends to fall in gold prices, but drops in high -risk markets tend to benefit precious metals.
Prices can fluctuate due to various factors. Geopolitical instability and serious recession can rapidly increase the price of gold from a safe shelter. Gold, a asset without yield, tends to rise when interest rates decrease, but usually the cost of yellow metal is squeezed. Nevertheless, most movements depend on how US dollars (USD) work because the assets are priced in dollars (XAU/USD). The dollar height tends to suppress gold prices, and the depreciation of the dollar can push the gold price.
