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- Gold price maintains a bearish trajectory, hovering near $3,235 in Friday’s early Asian trading hours.
- The ongoing de-escalation of global trade disputes continues to exert downward pressure on the price of Gold.
- Market participants are keenly awaiting the release of the US employment report for April, scheduled for later today.
The price of Gold (XAU/USD) is experiencing a slight decline, reaching a two-week low in the vicinity of $3,235 during the early hours of Friday’s Asian trading session. The observed reduction in trade friction between the United States and its key trading partners has diminished the demand for safe-haven assets, consequently impacting the performance of the precious metal.
President of the United States, Donald Trump, has indicated the potential for forthcoming trade agreements with nations including India, South Korea, and Japan, in a strategic move to transform his existing tariff policies into formalized trade arrangements. Moreover, reports emanating from Chinese state media late on Thursday suggest that the US has initiated contact with China to commence discussions pertaining to President Trump’s proposed 145% tariffs. This development signals a potential pathway toward resolving the protracted trade dispute between the two economic powerhouses.
The US Dollar (USD) is gaining strength amidst these positive developments, rendering gold a less appealing investment for holders of other currencies. This inverse relationship between the dollar and gold often sees gold prices fall as the dollar strengthens. “The market sentiment reflects a perception of reduced trade tensions and a diminished level of concern regarding the independence of the Federal Reserve, thereby lessening the immediate demand for safe-haven assets,” commented UBS analyst Giovanni Staunovo. Staunovo further added that investors are re-evaluating their risk assessments in light of the improving trade outlook. The upcoming US jobs data will be crucial in determining the Federal Reserve’s monetary policy path, with strong figures potentially reinforcing the dollar’s strength and further weighing on gold. Analysts predict a moderate increase in non-farm payrolls and a steady unemployment rate, which could influence market expectations regarding future interest rate hikes.
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