Expect a 2% Decrease in the Price of Gold (XAUUSD) Due to a Strong Dollar and a Reduction in Trading Tensions
Expect a 2% Decrease in the Price of Gold (XAUUSD) Due to a Strong Dollar and a Reduction in Trading Tensions
Key points: Gold (XAUUSD) falls 2% due to easing tensions over trade between the US and China and strengthening currency, reducing safe-haven demand.
China’s tariff exclusions on U.S. imports reduce trade anxieties, increasing gold prices and market mood.
The dollar gains its first weekly since March, pressuring gold prices and halting safe-haven flows.
Gold Prices Fall as US-China Tariff Tension Ease and Dollar Enhances
As U.S.-China trade tensions eased and the dollar rose, gold prices sank 2% on Friday, aiming for a weekly loss. Beijing’s exemption of certain U.S. products from its 125 percent tariffs raised hopes of a trade thaw, dragging on gold.
Chinese Tariff Easing Hits Gold Prices
China softened its trade position by exempting some U.S. products from tariffs. Companies have been requested to select medications, aeronautical components, and microchips as important items. This is a major step toward deescalation, lowering global trade disruption worries, analysts say. While good for the world’s economy, such easing frequently affects gold as investors migrate from safe-havens to more risky investments.
U.S. dollar rose 0.3% versus a basket of currencies, its first weekly rise since March. Foreign currency holders pay more for gold when the dollar is strong, limiting demand. The dollar rose due to optimism about U.S.-China trade negotiations and more risk appetite, lowering gold prices. Analysts warn that underlying uncertainty may sustain gold demand in the medium run.
The 10-year U.S. Treasury rate fell to 4.258%, showing cautious confidence about trade talks. Even while Trump has softened his stance and China has made some concessions, markets remain leery of any accord. Trump said tariffs could not be lifted without major compromises, keeping the market cautious and restricting risk-on.
The prices of gold are under pressure from trade pessimism and a higher dollar, but the outlook is cautious. Long-term bullion support comes from the absence of U.S.-China agreement specifics, global economic growth worries, and robust central bank gold purchasing. Traders will likely purchase gold declines as long as a complete trade deal remains unknown.
The daily swinging chart shows an uptrend, but momentum has turned to the negative after Tuesday’s closing value reversal top.
Imminent resistance is the $3380.20 minor pivot, and temporary retrace zone supporting is $3228.38 to $3164.23. The $3050.20 50-day moving average is key support and trend signal.
