Gold price is building on its rebound from one-month lows of $2,957 early Tuesday, replicating the moves seen in Monday's Asian trading. In doing so, Gold buyers retake the $3,000 threshold, but will they sustain the upswing amid escalating US-China trade tensions.
Gold price is snapping a three-day correction as the US Dollar (USD) has come under renewed selling pressure while the US Treasury bond yields have paused their rebound from six-month troughs.
China's efforts to step up lending to stabilize markets and a generalized recovery in risk sentiment revive the downside for the so-called safe-haven US Dollar. Meanwhile, Gold price also finds support from mounting concerns of an escalating trade war between the US and China.
The Chinese Commerce Ministry warned on Tuesday that it "firmly opposes and will take countermeasures if the US enacts additional 50% tariffs." This came after US President Donald Trump on Tuesday threatened to impose a new 50% tariff, which will be cumulative alongside the US's 10% across-the-board tariffs and targeted 34% "reciprocal" tariffs, which will take effect on Tuesday, April 9.
Additionally, increased expectations that the US Federal Reserve (Fed) could resume its interest rate-cutting cycle from May and deliver a total of five rate cuts in 2025 support the risk reset, while exerting renewed downward pressure on the dollar and US Treasury bond yields. Goldman Sachs now forecasts a total of 130 basis points (bps) in Fed rate cuts for 2025, up from 105 bps previously projected.
If the turnaround in global markets extends into the sessions ahead, the Greenback could see further weakness, leading to a sustained recovery in Gold price.
However, Gold buyers will likely remain wary of fresh developments on the global trade policies front, with the European Union (EU) preparing to impose retaliatory tariffs on US imports after having preferred negotiations.
Furthermore, as the US-China trade war escalates, China's likely refusal to withdraw its latest 34% tariffs could reignite risk aversion across the board, fueling demand for the precious metal as a safe haven.
Source: Fxstreet
Gold prices weakened slightly on Thursday (February 12th), as more solid US employment data reduced market confidence in an imminent Federal Reserve interest rate cut. The strong employment data promp...
Gold prices strengthened on Wednesday, supported by a weaker US dollar and falling US bond yields after the latest economic data reinforced the narrative that the Federal Reserve is likely to continue...
Gold experienced a slight correction in the European session on Tuesday (February 10th), but remained above $5,000/oz as the market held its breath ahead of a series of US data that could alter intere...
Gold held above the psychological $5,000 level at the start of the week, supported by a combination of factors that are "right" for the precious metal : physical demand from China, expectations of low...
Gold prices are still struggling to turn an intraday rebound into a sustained rally. After briefly falling to $4,654 (a four day low) and rebounding, prices were again rejected near $4,900. In the Eur...
Oil prices stabilized on Thursday (February 12th), as the market reassigned a risk premium to US-Iran tensions despite US inventory data showing swelling domestic supplies. This movement confirms one thing: geopolitical headlines are still more...
Gold prices weakened slightly on Thursday (February 12th), as more solid US employment data reduced market confidence in an imminent Federal Reserve interest rate cut. The strong employment data prompted market participants to shift expectations of...
The Hang Seng Index reversed its downward trend in Hong Kong on Thursday (February 12th), weakening by around 0.9% to around 27,000 after a strong session earlier. This decline halted the momentum of the short term rally, as investors began to...