- Gold price kicks off the new week on a softer note as bulls turn cautious amid trade optimism.
- US fiscal concerns and Fed rate cut bets undermine the USD, lending support to the commodity.
- Any further slide could be seen as a buying opportunity amid a bullish fundamental backdrop.
Gold price (XAU/USD) sticks to its modest intraday losses through the early part of the European session, though it lacks follow-through selling and remains close to over a two-week high touched on Friday. The latest optimism led by US President Donald Trump’s decision to delay the implementation of tariffs on the European Union (EU) prompts some profit-taking around the safe-haven commodity, especially after last week’s strong rally of nearly 5%.
Meanwhile, worries over the worsening US fiscal health and the growing acceptance that the Federal Reserve (Fed) will cut rates further in 2025 drag the US Dollar (USD) to over a one-month low. This, along with persistent geopolitical risks stemming from the protracted Russia-Ukraine war and conflicts in the Middle East, is holding back traders from placing aggressive bearish bets around the Gold price ahead of this week’s important US macro releases.
Daily Digest Market Movers: Gold price struggles to lure buyers as trade optimism undermines safe-haven assets
- In a mega U-turn, US President Donald Trump delayed the implementation of a 50% tariff on the European Union from June 1 until July 9. Earlier on Sunday Ursula von der Leyen, president of the European Commission, said that the EU was ready to move quickly in trade talks with the U.S. but needed more time to strike a deal.
- Trump’s sweeping tax cuts and spending bill, which would add an estimated $4 trillion to the federal primary deficit over the next decade, was passed in the lower house last week and will be voted on in the Senate this week. This adds to worries that the US budget deficit could worsen at a faster pace than previously expected.
- Softer-than-expected US Consumer Price Index (CPI) and the Producer Price Index (PPI) released earlier this week, along with a sluggish growth outlook, lifted bets that the Federal Reserve will eventually step in to support the economy. Traders are now pricing in at least two 25 basis points interest rate cuts by the Fed this year.
- Minneapolis Fed President Neel Kashkari said early this Monday that extended tariffs raise the risk of stagflation. The question now is a scale of stagflation, Kashkari added further. Meanwhile, the US Dollar prolongs a two-week-old downtrend and drops to a fresh monthly low, which, in turn, lends additional support to the Gold price.
- Meanwhile, Russian forces launched a massive drone and missile attack across Ukrainian cities, marking the war’s largest aerial attack to date. Trump called the attack unacceptable and said that he was considering new sanctions against Russia. Moreover, the continuous Israeli strikes on Gaza keep the geopolitical risk in play.
- The focus now shifts to FOMC minutes, due on Wednesday, which will look for cues about the rate-cut path. Traders will further confront the release of key US macro data – Durable Goods Order on Wednesday, the Prelim GDP, and the Personal Consumption Expenditure (PCE) Price Index on Thursday and Friday, respectively.
Gold price bulls have the upper hand while above a short-term ascending trend-line support near the $3,325 region
From a technical perspective, the recent move higher along an ascending trendline and positive oscillators on hourly/daily charts validates the near-term positive outlook for the Gold price. Hence, any subsequent slide is more likely to find decent support near the said trendline, currently pegged near the $3,325-3,324 region. A convincing break below, however, might prompt some technical selling and drag the XAU/USD to the $3,300 round figure en route to the $3,283 area, or the 200-period Simple Moving Average (SMA) on the 4-hour chart. The latter should act as a key pivotal point, which if broken decisively should pave the way for deeper losses.
On the flip side, momentum beyond Friday’s swing high, around the $3,366 area, will be seen as a fresh trigger for bullish traders and allow the Gold price to reclaim the $3,400 round figure. The next relevant resistance is seen near the $3,430 region, above which the XAU/USD could aim to challenge the all-time peak, around the $3,500 psychological mark touched in April, with some intermediate hurdle around the $3,465-3,470 zone.
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 Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.20% | -0.29% | 0.24% | -0.20% | -0.34% | -0.51% | 0.07% | |
| EUR | 0.20% | -0.08% | 0.49% | -0.00% | -0.14% | -0.30% | 0.29% | |
| GBP | 0.29% | 0.08% | 0.27% | 0.09% | -0.06% | -0.22% | 0.39% | |
| JPY | -0.24% | -0.49% | -0.27% | -0.45% | -0.60% | -0.82% | -0.19% | |
| CAD | 0.20% | 0.00% | -0.09% | 0.45% | -0.12% | -0.30% | 0.30% | |
| AUD | 0.34% | 0.14% | 0.06% | 0.60% | 0.12% | -0.20% | 0.44% | |
| NZD | 0.51% | 0.30% | 0.22% | 0.82% | 0.30% | 0.20% | 0.60% | |
| CHF | -0.07% | -0.29% | -0.39% | 0.19% | -0.30% | -0.44% | -0.60% |
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).
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