Trusted by over 15 Million Traders
The Most Awarded Broker
for a Reason
CATEGORIES
News
- 【XM Market Analysis】--USD/CHF Forecast: US Dollar Rallies from Support Against S
- 【XM Group】--USD/CAD Forecast: Tests 50-Day EMA
- 【XM Forex】--USD/CAD Forecast: Volatile Day
- 【XM Market Review】--USD/MXN Forecast: Greenback Continues to Pressure Mexican Pe
- 【XM Market Review】--WTI Crude Oil Monthly Forecast: January 2025
market news
Trade anxiety and weakening dollar push up safe-haven demand, gold prices rise
Wonderful introduction:
Walk out of the thorns, there is a bright road covered with flowers; when you reach the top of the mountain, you will see the cloudy mountain scenery like green clouds. In this world, a star falls and cannot dim the starry sky, a flower withers and cannot desolate the whole spring.
Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Official Website]: Trade anxiety and weakening US dollar push up safe-haven demand, and gold prices rise." Hope it will be helpful to you! The original content is as follows:
On Tuesday (July 22), driven by trade tensions and concerns about the independence of the Federal Reserve, demand for safe-haven is heating up, and gold ushers in a new round of upward momentum. Gold climbed to a five-week high on Tuesday, continuing Monday's rally, benefiting from the dual boost of weaker U.S. dollar and falling U.S. Treasury yields. Spot gold traded intraday at US$3429.26, up 0.95%, and bullish momentum continued to accumulate.
Trade negotiations and Fed independence have become the focus, supporting gold rises
The possibility of the EU and the United States reaching an agreement before the August 1 trade agreement deadline is becoming increasingly slim, and investors are wary of rising sentiment. This uncertainty eouu.cnbined with widespread trade tensions between the United States and its major trading partners remains the core factor supporting the attractiveness of gold's safe-haven. Currently, the average effective tariff rate in the United States has soared to 22.5%, the highest level since 1909, which directly pushed the consumer price index (CPI) to 2.7% year-on-year in June, further increasing market concerns about inflationary pressures and economic growth prospects.
Another driving force for market uneasiness is the resurfacement of doubts about the independence of the Federal Reserve. U.S. Treasury Secretary Becent said in an interview on Monday that "maybe it's time to examine the operation of the entire institution and its effectiveness" and proposed to review the Fed's non-monetary policy functions, mentioning issues such as "mission spread" and overspending of building renovation costs. The current market is focusing on Fed Chairman Powell's speech today, and investors are looking forward to responding to internal call for interest rate cuts. Fed governors Waller and Bowman both advocated immediate easing, believing that inflation caused by tariffs is temporary, but the market's expectations for a rate cut in July are only 4.7%, reflecting that Powell's deviation from the current 4.25%-4.5Suspicion of the 0% interest rate range.
The Fed's independence from political interference is the core pillar of its credibility. When this independence is questioned, investors worry that monetary policy may no longer be data-driven, but is affected by other factors, which in turn weakens confidence in the US dollar.
Data shows that the US dollar index (DXY) has fallen to 97.86, failing to hold the 50-day moving average of 98.60, and has recorded a further lower high since April, indicating weak market sentiment. Meanwhile, the 10-year U.S. Treasury yield fell to 4.37%, below the 50-day moving average and close to the 200-day moving average of 4.36%, indicating that investors' demand for U.S. fixed-income assets has weakened, attracting more buying for gold.
The game between multiple factors, the upward space of gold is partially restricted
Although gold has traditionally benefited from economic uncertainty and risk aversion, recent developments have set certain restrictions on its upward space. As regulatory transparency increases, institutional interest in Bitcoin increases, with some safe-haven funds flowing from gold to this alternative asset; at the same time, U.S. stocks (especially tech stocks) remain attractive to investors expecting a Fed rate cut. Even with high market uncertainty, the trend of these funds flowing to alternative assets still poses a resistance to gold. However, geopolitical risks continue to exist, and central banks in various countries continue to buy gold as reserve assets, which still provides long-term support for the gold market.
The technical side is bullish momentum accumulation, gold breaks through $3,400
From the technical trend, gold has broken through the $3,400 resistance level, confirming that it has broken through the symmetrical triangle pattern formed in recent weeks. Both the price trend and the Relative Strength Index (RSI) show bullish momentum supports this breakthrough - the RSI is currently close to 63, indicating that there is still room for upside before entering the overbought range. Gold currently maintains a strong bullish structure with key support between $3331 and $3310.
Price has stood firmly above the 23.6% Fibonacci retracement level ($3372) of April low to high, with the next resistance at the June 16 high of $3452 followed by an April record high of $3500. If it can continue to break through $3451.53, it will directly hit an all-time high of $3500.20, especially when Powell makes dovish remarks; even if Powell maintains a neutral or cautious stance, differences within the Federal Reserve may continue to lower the dollar and provide support for gold.
In the downside, spot support is near the breakout level of $3,400, followed by the 50-day moving average of $3,331; if it falls below this level, the 38.2% Fibonacci retracement level of $3,292 may become the focus.
Overall, this breakthrough marks a rekindled bullish interest in gold, and it is necessary to stand firm above $3,400 at the daily closing price to confirm the sustainability of the upward action energy. Gold price forecasts remain bullish ahead of the August 1 trade tariff deadline, with rising risk premiums mixed with global economic and geopolitical uncertainty.The surface and fundamentals form a double support.
The above content is all about "[XM Forex Official Website]: Trade anxiety and weakening of the US dollar push up safe-haven demand, and gold prices rise". It is carefully eouu.cnpiled and edited by the editor of XM Forex. I hope it will be helpful to your trading! Thanks for the support!
Every successful person has a beginning. Only by having the courage to start can you find the way to success. Read the next article now!
Disclaimers: XM Group only provides execution services and access permissions for online trading platforms, and allows individuals to view and/or use the website or the content provided on the website, but has no intention of making any changes or extensions, nor will it change or extend its services and access permissions. All access and usage permissions will be subject to the following terms and conditions: (i) Terms and conditions; (ii) Risk warning; And (iii) a complete disclaimer. Please note that all information provided on the website is for general informational purposes only. In addition, the content of all XM online trading platforms does not constitute, and cannot be used for any unauthorized financial market trading invitations and/or invitations. Financial market transactions pose significant risks to your investment capital.
All materials published on online trading platforms are only intended for educational/informational purposes and do not include or should be considered for financial, investment tax, or trading related consulting and advice, or transaction price records, or any financial product or non invitation related trading offers or invitations.
All content provided by XM and third-party suppliers on this website, including opinions, news, research, analysis, prices, other information, and third-party website links, remains unchanged and is provided as general market commentary rather than investment advice. All materials published on online trading platforms are only for educational/informational purposes and do not include or should be considered as applicable to financial, investment tax, or trading related advice and recommendations, or transaction price records, or any financial product or non invitation related financial offers or invitations. Please ensure that you have read and fully understood the information on XM's non independent investment research tips and risk warnings. For more details, please click here