- The price of gold is decreasing because the growing profitability of the Treasury of the United States is burdened with incompatible assets.
- Noble metal can find support from unthreatening demand among the implementation of American tariffs.
- Gold also attracted buyers because the US has stopped military assistance to Ukraine.
The price of gold (Xau/USD) stops its two -day victorious run on Wednesday, because growing American treasury gives pressure on incompatible resources. However, precious metal can receive support up from unthreatening demand in connection with the implementation of American tariffs. 25% of Trump’s fees on the import of Mexico and Canada entered into force on Tuesday, along with a escalate in Chinese duties to 20%, escalating commercial tensions and causing retaliation.
However, the Secretary of American Trade Howard Lutnick suggested in an interview with Fox News that Trump may consider his tariff policy again less than 48 hours after its implementation. He noticed that if the USMCA rules are observed, you can offer relief. However, the New York Times announced that Trump privately signaled that he was going to keep the tariffs.
Safe gold attracted buyers when the US stopped military assistance in Ukraine. Bloomberg quoted the defense clerk, stating that all American military equipment would not be grounded in Ukraine yet, including transit weapons through aircraft and ships, as well as those who are waiting in transit areas in Poland. On Friday, tension increased between US President Donald Trump and the leader of Ukrainian Wolodymyr Zelenskyy during negotiations in the field of peace agreement.
US President Donald Trump on Wednesday provides a joint address of the session in the Capitol building in Washington. This means his first congress speech since he returned to power.
Lower gold price edges in connection with the growing profitability of the US treasury
- The American dollar indicator (DXY), which measures USD in relation to the six main currencies, trades around 105.70 at the time of writing, increasing among the growing profitability of the US treasury with 2- and 10 years of 10-year profitability to American bonds of 3.98% and 4.25%, respectively.
- However, USD was a decrease in pressure in connection with the growing fears of slowing down economic growth and the impact of tariffs on the US economy. Markets assume that President Trump will find a reason to undo his tariff threats.
- The Secretary of American Trade Howard Lutnick stated in a television interview at Fox News that President Trump may consider his tariff policy less than 48 hours after its implementation. Lutnick pointed out that if the rules of Usmca are observed, Trump is considering offering relief. 25% of President Trump’s tariffs for goods from Canada and Mexico entered on Tuesday, along with the doubling of duties in Chinese imports up to 20%.
- Canada confirmed that it would impose American imports on US import. The Chinese Ministry of Trade announced on Tuesday that it would hit additional tariffs up to 15% on the import of key agricultural products from the USA.
- This throws the risk of a global trade war and burdens the sentiments of investors that should act as a wind for unthreatening precious metal and lend a hand reduce deeper losses among the bear surrounding the American dollar.
- The PMI Institute for Supply Management (ISM) fell to 50.3 in February from 50.9 in the previous month, while the price index exceeded almost three years of the highest level among concerns about the obligations related to import.
- It is fears that Trump’s trading tariffs would undermine consumer expenses and concerns about the perspective of the largest economy in the world. This can additionally support the XAU/USD pair.
Technical analysis: The price of gold has key psychological support at USD 2900 near nine EMA days
The price of gold (Xau/USD) trads around $ 2,910 for an ounce of Troy on Wednesday. The technical analysis of the daily chart suggests that the metal price consolidates in the formula of the growing channel, which suggests that the stubborn prejudice is intact. In addition, the 14-day relative strength indicator (RSI) remains above 50, strengthening bear.
Xau/USD can be focused on primary resistance at the highest level of USD 2,956, registered on February 24.
On the other hand, immediate support is located on a nine -day interpretation average (EMA) of $ 2,902. The break below this level can weaken the tiny -term price rush and lead to the testing of the lower border of the ascending channel at USD 2,583.
