- Gold price scales higher for the fourth straight day amid a combination of supporting factors.
- US fiscal concerns and Fed rate cut bets undermine the USD, benefiting the precious metal.
- Renewed US-China trade tensions and geopolitical risks further support the XAU/USD pair.
Gold price (XAU/USD) attracts buyers for the fourth consecutive day and climbs to a nearly two-week high during the Asian session on Thursday. The US sovereign credit rating downgrade by Moody’s and growing worries about rising US deficit on the back of US President Donald Trump’s sweeping tax bill keep investors on edge. Moreover, renewed US-China trade tensions and geopolitical risks hit the global risk sentiment, which, in turn, benefits the safe-haven precious metal.
Meanwhile, the US Dollar (USD) languishes near a two-week low amid bets that the Federal Reserve (Fed) will lower borrowing costs further in 2025 on the back of easing inflationary pressures and a sluggish economic growth outlook. Furthermore, a poor response to the 20-year US bond auction reinforced the view that market participants are shying away from US assets. This, in turn, contributes to the USD selling bias and lends additional support to the non-yielding Gold price.
Daily Digest Market Movers: Gold price benefits from sustained safe-haven demand and a weaker USD
- The Republican-controlled US House of Representatives Rules Committee voted to advance President Donald Trump’s sweeping tax-cut and spending bill, setting the stage for a vote on the House floor. The highly anticipated “One Big, Beautiful Bill” could add around $3 trillion to $5 trillion to the country’s already hefty debt pile.
- Furthermore, a crucial auction of 20-year Treasury bonds on Wednesday saw soft demand, pointing to growing worries that the tax and spending bill will worsen the US budget deficit at a faster pace than previously expected. This comes after Moody’s downgraded the US sovereign credit rating from the top “Aaa” last Friday.
- The US Dollar has been trending lower on the back of US fiscal concerns. Adding to this, bets that the Federal Reserve will lower interest rates further this year amid evidence of easing inflation and a dismal growth forecast continue to push the USD lower, lifting the non-yielding Gold price to a nearly two-week high on Thursday.
- Meanwhile, China accused the US of abusing export control measures and violating Geneva trade agreements after the US issued guidance warning companies not to use Huawei’s Ascend AI chips. China’s Commerce Ministry said on Wednesday that US measures on advanced chips are ‘typical of unilateral bullying and protectionism.’
- On the geopolitical front, Israel’s military continued to pound the Gaza Strip and block desperately needed food aid. Adding to this, Trump reportedly told European leaders that Russian President Vladimir Putin isn’t ready to end the war with Ukraine as he thinks he is winning, which lends additional support to the safe-haven commodity.
- Traders now look to the release of flash PMI prints for a fresh insight into the global economic health. The US economic docket also features the release of the usual Weekly Initial Jobless Claims and Existing Home Sales, which might influence the USD. This, along with the broader risk sentiment, could drive the precious metal.
Gold price bullish technical setup supports prospects for a move beyond the $3,363-3,365 resistance
From a technical perspective, the XAU/USD pair now seems to have found acceptance above the 61.8% Fibonacci retracement level of the recent downfall from the monthly peak. This comes on the back of this week’s breakout through the $3,250-3,255 resistance zone and favors bullish traders. Moreover, oscillators on the daily chart have been gaining positive traction and suggest that the path of least resistance for the Gold price remains to the upside. Hence, a subsequent move towards the next relevant hurdle near the $3,363-3,365 region, en route to the $3,400 round figure, looks like a distinct possibility.
On the flip side, the $3,316-3,315 area, or the 61.8% Fibo. retracement level resistance breakpoint now seems to protect the immediate downside ahead of the $3,300 mark. Any further decline below the $3,285 area is more likely to attract fresh buyers and remain limited near the $3,255-3,250 hurdle-turned-support. A convincing break below the latter, however, might prompt some technical selling and drag the Gold price to the $3,200 mark.
US Dollar PRICE This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -1.28% | -1.07% | -1.36% | -0.89% | -0.68% | -0.75% | -1.41% | |
| EUR | 1.28% | 0.20% | -0.02% | 0.47% | 0.74% | 0.61% | -0.12% | |
| GBP | 1.07% | -0.20% | -0.52% | 0.27% | 0.54% | 0.40% | -0.32% | |
| JPY | 1.36% | 0.02% | 0.52% | 0.49% | 0.86% | 0.83% | 0.00% | |
| CAD | 0.89% | -0.47% | -0.27% | -0.49% | 0.24% | 0.14% | -0.58% | |
| AUD | 0.68% | -0.74% | -0.54% | -0.86% | -0.24% | -0.13% | -0.83% | |
| NZD | 0.75% | -0.61% | -0.40% | -0.83% | -0.14% | 0.13% | -0.72% | |
| CHF | 1.41% | 0.12% | 0.32% | -0.01% | 0.58% | 0.83% | 0.72% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
