- At the beginning of this week, we noticed strong fluctuations in gold prices, with a rise towards the resistance level of $2650 per ounce.
- This was following reports to the financial markets that Trump would ease the pace of his tariffs, then the gold price index quickly retreated to the support level of $2614 per ounce.
- Obviously, this came after Trump personally denied such reports.
- The gold price rebounded at the beginning of trading on Tuesday, stabilizing around the resistance level of $2646 per ounce. Awaiting important market catalysts, including the announcement of US jobs figures and the minutes of the latest Federal Reserve meeting.
The gold market will monitor the policies of the US central bank
Currently, investors will focus their attention with caution on the main US labour market data and the minutes of the latest Federal Reserve monetary policy meeting, which may affect US interest rate expectations. In this regard, comments by Federal Reserve Governor Lisa Cook reinforced the US central bank’s cautious approach towards cutting interest rates, pointing to the resilience of the labour market and persistent inflation. This could negatively impact bullion prices as higher interest rates weaken the appeal of holding non-yielding assets. However, spot gold prices remain supported by ongoing geopolitical tensions and strong buying demand from central banks.
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US Dollar Reacts to Tariff Reports
According to forex market trades, the US dollar has reduced its sharp decline against most major currencies after Donald Trump denied a report that his tariff plans would not be as broad as initially feared. As a result, the US Dollar Index (DXY) fell by more than 1%, its biggest daily decline in more than a year, following a report in the Washington Post that Trump's aides were exploring a tariff plan covering only essential imports.
As a result, the Euro found an opportunity to rise by 1.2% against the US dollar, its largest daily gain since August 2024, and the Pound Sterling also rose by 1%. Meanwhile, before currency prices returned to the levels they were at before the release of these reports.
The US dollar had benefited from expectations that Trump would impose tariffs on major US trading partners, harming currencies including the yuan and the euro. Moreover, a tariff program that covers only key sectors such as the defence industrial supply chain would have a less severe impact on the global economy and US inflationary pressures than a program covering a broader range of imports, meaning the dollar has room to decline.
US Dollar Performance Will Await Important Data
Currently, the US dollar price will remain stable until investors and financial markets react to the announcement of the US non-farm payrolls numbers in order to obtain more evidence on the prospects of reducing US interest rates. In this regard, traders added to the bets on US monetary easing after the tariff report, pricing in about 40 basis points of Fed cuts in 2025 compared to 38 basis points earlier.
Trading Tips:
Gold will remain on its upward path and watch carefully for any chances of price decline to buy but without risk.
Gold Price Technical Analysis and Expectations Today:
According to the daily chart above and according to the forecasts of gold analysts today, bulls are trying to push the gold price towards the psychological resistance of $2700 per ounce, which could stimulate strong buying of gold and thus prepare for new record highs. Technically, moving towards this peak requires moving first towards resistance levels of $2666 and $2685 per ounce. The volatility indicators, the Relative Strength Index and the MACD, are currently in a neutral position, which means a relative balance between bears and bulls. The events and data of this week will provide an opportunity for one of them to take off.
Carefully, monitor any opportunities for gold prices to decline to consider buying again. Moreover, without taking risks and activating take-profit and stop-loss orders to ensure the safety of the trading account from any sudden sharp price reversals. Currently, the closest support levels for gold prices are $2625, $2605, and $2585 per ounce.
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