- Investor demand for gold bullion as a safe haven, driven by US tariff approvals and a weakening dollar, has pushed spot gold prices to $2,930 per ounce, where they are stabilizing in early Thursday trading.
- The bullish reversal may continue until the reaction to the announcement of US job numbers tomorrow, which will affect market expectations for the future of US central bank policies.
- Amidst the US dollar's decline, Forex market trading saw next week's forecast models showing US dollar strength against the Euro, Canadian dollar, British pound, and everything else after the tariff confirmations.
The forecasts were based on the assumption that the Forex market still sees tariffs as supportive of US inflation, interest rates, and the dollar, which was expected by a clear majority of analysts. However, the US dollar index ultimately fell by one percent for two consecutive days and appears to be heading for a third notable daily decline according to early mid-week movement.
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Trading Tips:
Gold trading is better to buy from lower levels and do not risk buying from record highs that move technical indicators towards strong overbought levels.
US Dollar Performance Will Remain Under Trump's Tariff Pressure
According to financial market experts’ expectations, the slowdown in US economic data has become clear, prompting financial markets to bet on further US interest rate cuts by the Federal Reserve. In this regard, financial markets show that investors are pricing in 75 basis points of cuts by the December meeting. This means three cuts of 25 basis points, which is more than the single cut expected in early February. This weighs on US bond yields, which in turn weighs on the dollar mechanically.
Looking ahead, if tariffs = a weaker US dollar relationship continues, the currency could certainly recover in the event of any tariff reversal by Trump. We have already heard that this may be the case, as US Commerce Secretary Howard Lutnick told Fox News on Tuesday that the president was looking to "reach a resolution" with Canada and Mexico.
The decline in the US dollar won’t bother Trump, but the decline in stock markets will. Furthermore, the decline in US stocks as tariffs kick in shows clear concern that the economy may be in trouble. Therefore, a pullback and relief from the pressure on the US dollar may be at stake.
Gold Price Technical Analysis and Expectations Today:
According to trading via the daily chart, today’s gold analysts’ forecasts still indicate a strong uptrend, and as I mentioned before, stability around and above the $2,900 resistance will continue to motivate bulls to move with technical buy deals and thus prepare for stronger upward breakouts. Currently, the closest resistance levels are $2,948 and $2,975, respectively, and from the latter level, gold may move towards the historical psychological peak of $3,000 per ounce faster than previously expected. In contrast, and over the same period of time, the support at $2870 per ounce will remain the most important to break the current upward trend.
In general, global geopolitical and trade tensions, more central bank gold purchases. Also, the weakness of the US dollar will remain the most important factors supporting further gains in the gold price index.
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