Gold Under Pressure But Not Falling!
The price of gold (XAU/USD) moved slightly lower ahead of the opening of the European trading session on Tuesday, although it has not shown a strong bearish trend. This precious metal is still stable above the lowest level in a week from the previous close. The pressure comes from expectations of new tariffs by US President Donald Trump which are expected to push up US inflation - making the Federal Reserve tend to maintain high interest rates, thus weakening the appeal of gold which does not provide a yield.
On the other hand, the US dollar (USD) also looks weak, because market players are worried about the economic impact of tariffs and the high fiscal deficit in the US. This condition makes gold, which is usually in demand when the dollar is strong, get support from geopolitical concerns. Even so, traders still seem reluctant to take large positions before a clear signal appears from the minutes of the Fed (FOMC) meeting which will be released on Wednesday.
Investors are currently in a wait-and-see position, not wanting to rush into taking big steps. The mixed sentiment between tariff pressures and interest rate expectations has made gold's movement tend to be sideways since the beginning of the week. The main focus is now on the FOMC minutes which could provide clues to the direction of US monetary policy in the future.
Overall, gold is currently being tested by a fundamental contradiction: rising interest rate pressure versus support from geopolitical risks. As long as the dollar has not really rebounded and inflation remains subdued, gold is likely to remain in a limited range. Traders are advised to maintain moderate positions while waiting for clearer signals this week.
Source: (ayu-newsmaker)
