- Gold prices face renewed selling pressure on Friday as improved risk appetite diminishes demand for safe-haven investments.
- A slight increase in USD demand is contributing to the downward momentum observed in the commodity.
- Ongoing geopolitical tensions, trade concerns, and expectations of Federal Reserve rate reductions are cushioning the decline for the XAU/USD.
The price of gold (XAU/USD) has rebounded modestly from its intraday low, edging back above the $3,300 level recently, yet maintains a downward trend during the initial part of the European trading session on Friday. The Chinese Foreign Ministry refuted claims of active tariff negotiations with the United States, dampening market optimism and providing some support to the safe-haven asset. Furthermore, the prolonged conflict between Russia and Ukraine sustains geopolitical risk premiums, thereby restricting further losses for gold.
Additionally, anticipation of a more proactive easing of monetary policy by the Federal Reserve (Fed) suggests prudence before initiating substantial short positions on gold, which offers no yield. Nevertheless, market participants remain optimistic regarding a possible reduction in trade tensions between the world’s leading economies, which continues to foster a generally favorable sentiment in equity markets. This factor, coupled with a slight strengthening of the US Dollar (USD), is discouraging traders from establishing new long positions on the XAU/USD currency pair.
