- The price of gold sees that a safe and sound marina in the comments of Israel is considering hitting Iran Nuclear Facality.
- President Trump conflicts with republican members in his fiscal packages plan through the US Congress.
- The gold broke out of the tense range and saw how it was higher.
Gold (Xau/USD) On Wednesday, it rises higher in the direction of $ 3,309 at the time of writing, with fear that tensions in the Middle East are coming out of control again, and Trump’s fiscal account did not transfer the congress. In slow trade on Tuesday, CNN announced that Israel is considering attacking nuclear places in Iran. While the former president of the United States (USA) Joe Biden was able to change the mind of Israeli Prime Minister Benjamin Netanyahu, US President Donald Trump saw his diplomatic efforts fall apart, and the markets are wondering if Trump is still able to control Netanyahu.
In the United States, President Trump is in the face of failures at home, and the administration tries to get sufficient support to go through the Congress of his tax. Frustration was created for Trump on Capitol, talking to the legislators, who demanded a significant augment in the limit of tax and local deduction (salt).
Daily Digest Market Movers: Cicha on all fronts
- Safe-Haven Gold support has been strengthened by the CNN report, which indicated that Israel can plan a strike in Iranian nuclear facilities. The report said whether it was clear or the final decision was made to conduct the attack. Markets will want to look for confirmation from US or Israel leaders.
- During a telephone conversation between US President Trump and Russian President Vladimir Putin, the Vatican proposed to organize all events related to the peace conversations of Ukraine-Russia.
- The Financial Times reports that American legislators are pressing Northern Ireland to approve the American Gold Mine potentially worthy billions of pounds for the local economy, warning that the project delay risks that he is rejecting foreign capital.
Technical analysis of gold price: surprise
The last headlines in the Middle East and on the deads in the US Congress are another hit for President Trump and his credibility, and in a wider extent of the credibility of the American dollar and the US economy. Gold uses uncertainty and can reach a peak above USD 3350 if Israel confirms its plans.
On the other hand, R1 resistance in the amount of USD 3324 is the first level to pay attention to, because it is in line with the highest level of May 12. R2 resistance to USD 3,54 is near R1 and can open the door to return to USD 3,431, which were peaks 21 and 7 April and 7 and 7 May.
In case of defects Gold price declines. On the other hand, the Daily Pivot is $ 3,263. Then there is a technical key level of USD 3,245, and just below USD 3231 as the S1 endpownia.
Xau/USD: daily Chart
FAQ in American dollars
The American dollar (USD) is the official currency of the United States of America and the “de facto” currency of a significant number of other countries where it is in circulation with local notes. It is most often a commercial currency in the world, which is over 88% of all global currency turnover, i.e. an average of $ 6.6 trillion of transactions per day, according to the data from 2022. After the Second World War, USD took over from the British pound as the reserve currency of the world. For most of its history, the American dollar was supported by gold, up to the Bretton Woods agreement in 1971, when the golden standard disappeared.
The most crucial single factor affecting the value of the American dollar is the monetary policy, which is shaped by the Federal Reserve (FED). The Fed has two seats: achieving price stability (control inflation) and supporting full employment. Its main tool to achieve these two goals is to adjust interest rates. When the prices rise too quickly and inflation is above 2% of the Fed target, the FED will augment the rates, which helps USD values. When inflation drops below 2% or the unemployment rate is too high, the Fed may reduce interest rates that are weighing in the green area.
In extreme situations, the Federal Reserve can also print more dollars and introduce quantitative alleviation (QE). QE is a process in which the Fed significantly increases the credit flow in the detained financial system. It is a non -standard policy measure used in the event of a loan parched, because the banks will not borrow (for fear of the contractor). This is the last last, when just lowering interest rates is unlikely to achieve the necessary result. The weapon of choosing the Fed was a FED weapon to combat the credit crisis, which took place during the great financial crisis in 2008. This includes FED printing more dollars and using them to buy US government bonds mainly from financial institutions. QE usually leads to a weaker American dollar.
Quantitative twist (QT) is the opposite process in which the federal reserve stops buying bonds from financial institutions and does not reinvest from the bonds that it has in up-to-date purchases. This is usually positive for the American dollar.
