Tuesday saw a little decline in the price of gold as the likelihood of a July rate decrease by the Fed dwindles.
Investor sentiment is impacted by worries about how Trump's tariffs will affect the economy.
The XAU/USD pair's losses are kept to a minimum by the appearance of minor USD weakening.
Although it lacks negative conviction and is safely above a one-week low set the day before, the price of gold (XAU/USD) is still down going into Tuesday's European session. One of the main factors hurting the non-yielding yellow metal was the expectation that US President Donald Trump's tariffs would support US inflation in the upcoming months and compel the Fed to maintain stable interest rates.
However, due to US budgetary problems and fears about the possible economic consequences of Trump's trade tariffs, the US dollar (USD) finds it difficult to attract buyers. In addition, ongoing geopolitical threats support the price of gold, which is a safe haven. Additionally, traders are hesitant and choose to hold off on making new directional bets until they have more information on the Fed's rate-cut trajectory. As a result, the FOMC minutes on Wednesday continue to be the main focus.
Daily Digest Market Movers: As Fed rate cut bets decline, gold price bulls stay out of the market
In addition to sending letters announcing greater trade tariffs against numerous Asian and African nations, US President Donald Trump also extended the deadline for the introduction of retaliatory penalties to August 1. Trump further promised that there will be no exceptions to the 10% tariff imposed on any nation that supports the BRICS' anti-American activities.
Because of increasing import levies and a still strong US job market, the Fed is now projected to maintain high interest rates in anticipation of worsening inflation. In response, this caused the US dollar to rise to a nearly two-week high on Monday and proved to be a major factor undermining demand for the non-yielding price of gold on Tuesday during the Asian session.
However, given the uncertainties surrounding the possible economic effects of Trump's tariffs and US fiscal concerns, the USD bulls are hesitant. Furthermore, a new wave of the global risk-aversion trade, represented by a sea of red on the global equities markets, may bolster the safe-haven precious metal and warn aggressive negative traders to exercise care.
The FOMC meeting minutes release on Wednesday will be the market's main focus if there is no significant economic news from the US on Tuesday that could move the market. More clues about the Fed's rate-cut trajectory will be sought after by investors, which will boost demand for the USD in the near future and provide the non-yielding yellow metal a new orientation.
Below the 100-SMA on H4, gold price bears are in control; the $3,300 mark is crucial.
On the 4-hour chart, the overnight strong recovery was rejected close to the 100-period Simple Moving Average (SMA). Currently, the aforementioned barrier is located close to the $3,347–3,348 region, with the $3,358–3,360 supply zone coming next. If the latter is consistently exceeded, a short-covering move might be triggered, allowing the price of gold to recover to the round $3,400 mark.
The XAU/USD pair may accelerate its decline into the next pertinent support near the $3,270 horizontal zone if the $3,300–3,295 area fails to defend the immediate downside. The price of gold may continue to decline and possibly reach the June monthly swing low or the $3,248–3,247 range.
Investor sentiment is impacted by worries about how Trump's tariffs will affect the economy.
The XAU/USD pair's losses are kept to a minimum by the appearance of minor USD weakening.
Although it lacks negative conviction and is safely above a one-week low set the day before, the price of gold (XAU/USD) is still down going into Tuesday's European session. One of the main factors hurting the non-yielding yellow metal was the expectation that US President Donald Trump's tariffs would support US inflation in the upcoming months and compel the Fed to maintain stable interest rates.
However, due to US budgetary problems and fears about the possible economic consequences of Trump's trade tariffs, the US dollar (USD) finds it difficult to attract buyers. In addition, ongoing geopolitical threats support the price of gold, which is a safe haven. Additionally, traders are hesitant and choose to hold off on making new directional bets until they have more information on the Fed's rate-cut trajectory. As a result, the FOMC minutes on Wednesday continue to be the main focus.
Daily Digest Market Movers: As Fed rate cut bets decline, gold price bulls stay out of the market
In addition to sending letters announcing greater trade tariffs against numerous Asian and African nations, US President Donald Trump also extended the deadline for the introduction of retaliatory penalties to August 1. Trump further promised that there will be no exceptions to the 10% tariff imposed on any nation that supports the BRICS' anti-American activities.
Because of increasing import levies and a still strong US job market, the Fed is now projected to maintain high interest rates in anticipation of worsening inflation. In response, this caused the US dollar to rise to a nearly two-week high on Monday and proved to be a major factor undermining demand for the non-yielding price of gold on Tuesday during the Asian session.
However, given the uncertainties surrounding the possible economic effects of Trump's tariffs and US fiscal concerns, the USD bulls are hesitant. Furthermore, a new wave of the global risk-aversion trade, represented by a sea of red on the global equities markets, may bolster the safe-haven precious metal and warn aggressive negative traders to exercise care.
The FOMC meeting minutes release on Wednesday will be the market's main focus if there is no significant economic news from the US on Tuesday that could move the market. More clues about the Fed's rate-cut trajectory will be sought after by investors, which will boost demand for the USD in the near future and provide the non-yielding yellow metal a new orientation.
Below the 100-SMA on H4, gold price bears are in control; the $3,300 mark is crucial.
On the 4-hour chart, the overnight strong recovery was rejected close to the 100-period Simple Moving Average (SMA). Currently, the aforementioned barrier is located close to the $3,347–3,348 region, with the $3,358–3,360 supply zone coming next. If the latter is consistently exceeded, a short-covering move might be triggered, allowing the price of gold to recover to the round $3,400 mark.
The XAU/USD pair may accelerate its decline into the next pertinent support near the $3,270 horizontal zone if the $3,300–3,295 area fails to defend the immediate downside. The price of gold may continue to decline and possibly reach the June monthly swing low or the $3,248–3,247 range.
