Gold price sticks to modest intraday gains on softer risk tone, weaker USD; lacks follow-through
- Gold price regains positive traction on Monday as geopolitical risks revive safe-haven demand.
- The USD remains depressed below a multi-week high and further benefits the precious metal.
- The market focus now shifts to the crucial two-day FOMC policy meeting starting on Tuesday.
Gold price (XAU/USD) sticks to its modest intraday gains above the $3,250 level through the Asian session on Monday, though it lacks strong follow-through buying or a bullish conviction. Against the backdrop of the protracted Russia-Ukraine war, an escalation of the Middle East conflict keeps the geopolitical risk in play. Furthermore, the uncertainty over US President Donald Trump’s tariff plans weighs on investors’ sentiment and benefits the traditional safe-haven precious metal.
Meanwhile, heightened economic uncertainty on the back of Trump’s tariffs fails to assist the US Dollar (USD) to capitalize on the upbeat US monthly jobs report-inspired bounce. Apart from this, bets for an imminent start of the Federal Reserve’s (Fed) rate-cutting cycle lend additional support to the non-yielding Gold price. Traders, however, seem reluctant to place aggressive bets and opt to move to the sidelines ahead of a two-day FOMC policy meeting starting on Tuesday.
Daily Digest Market Movers: Gold price is underpinned by reviving safe-haven demand and weaker USD
- In an interview broadcast on Sunday, Russian President Vladimir Putin stated that Russia has the means and strength to bring the Ukraine conflict to a logical conclusion. This comes ahead of Putin’s unilaterally declared three-day ceasefire over May 8-10. Russia, however, had dismissed proposals from Ukraine and the US for an unconditional 30-day ceasefire.
- Israeli Prime Minister Benjamin Netanyahu promised to respond to Yemen’s Houthi rebels ballistic missile attack that hit Ben Gurion International Airport on Sunday and added that Iran would also face consequences from the strike. Responding to this, Iran’s Defence Minister Aziz Nasirzadeh said that Tehran would strike back if the US or Israel attacked.
- US President Donald Trump on Sunday announced a 100% tariff on all movies produced in foreign countries. His unpredictable trade stance unsettles investors, driving safe-haven flows that help gold extend its rebound from last week’s low near the $3,200 round figure.
- Traders trimmed bets that the Federal Reserve will cut rates as soon as in June following the better-than-expected release of the US jobs data on Friday, which showed that the economy added 177K jobs in April against 130K expected. Additional details revealed that the Unemployment Rate held steady at 4.2%, pointing to a still resilient US labor market.
- The US Dollar, however, struggles to attract any meaningful buyers and remains depressed below a multi-week high touched last Thursday amid heightened economic uncertainty on the back of Trump’s tariffs. This lends additional support to the XAU/USD pair ahead of the highly-anticipated two-day FOMC policy meeting starting on Tuesday.
- Furthermore, speeches from influential Fed officials later this week will be scrutinized for insights into the future monetary policy trajectory and drive the USD demand. In the meantime, the US ISM Services PMI on Monday, which, along with trade-related developments and geopolitical headlines, could produce some impetus to the XAU/USD pair on Monday.
Gold price bulls needs to wait for a move beyond $3,260-3,265 before positioning for any further appreciating move
From a technical perspective, the precious metal last week showed some resilience below the 50% Fibonacci retracement level of the move higher from the vicinity of mid-$2,900s. The subsequent bounce from the $3,200 neighborhood warrants some caution before positioning for an extension of the recent pullback from the $3,500 mark, or the all-time peak touched in April. Any further move up, however, is more likely to confront stiff resistance near the $3,260-3,265 horizontal support breakpoint, now turned resistance. A sustained strength beyond the latter, however, could lift the Gold price to the $3,348-$3,350 supply zone en route to the $3,367-$3,368 intermediate hurdle and the $3,400 round figure.
On the flip side, weakness below the $3,225 region (50% Fibo. level) might continue to find some support ahead of the $3,200 mark. A convincing break below the said handle would make the Gold price vulnerable to accelerate the downfall towards the $3,170-3,165 confluence, comprising the 61.8% Fibo. level and the 200-period Simple Moving Average (SMA) on the 4-hour chart. Some follow-through selling will be seen as a fresh trigger for bearish traders and pave the way for a further near-term depreciating move.
US Dollar PRICE Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.07% | -0.31% | -0.43% | -0.06% | -0.47% | -0.71% | -0.28% | |
| EUR | 0.07% | 0.03% | -0.10% | 0.28% | -0.13% | -0.37% | 0.06% | |
| GBP | 0.31% | -0.03% | -0.36% | 0.25% | -0.16% | -0.40% | 0.03% | |
| JPY | 0.43% | 0.10% | 0.36% | 0.39% | -0.03% | -0.18% | 0.27% | |
| CAD | 0.06% | -0.28% | -0.25% | -0.39% | -0.70% | -0.65% | -0.22% | |
| AUD | 0.47% | 0.13% | 0.16% | 0.03% | 0.70% | -0.24% | 0.19% | |
| NZD | 0.71% | 0.37% | 0.40% | 0.18% | 0.65% | 0.24% | 0.42% | |
| CHF | 0.28% | -0.06% | -0.03% | -0.27% | 0.22% | -0.19% | -0.42% |
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).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
