The Golden Bounce: How Gold Surpassed Vital Support
Markets began to shift on Tuesday, with the precious metal making a strong comeback after a tumultuous Monday. Gold prices had reached a critical juncture, with the metal trading just above the $3,000 mark as traders sought to gauge the metal’s resilience. The bounce was a testament to the enduring appeal of gold as a safe-haven asset, even in the face of escalating trade tensions and market volatility.
Market Drivers: A Tale of Two Forces
The market dynamics at play on Tuesday were complex, with two key drivers vying for attention. On the one hand, there was the technical aspect of the market, with gold prices exhibiting a familiar pattern of resistance and support. On the other hand, the geopolitical arena was ablaze with tensions between the US and China, with US President Donald Trump threatening to impose additional tariffs on Chinese imports.
- US President Trump threatened to slap an additional 50% levy on Chinese imports, while Beijing responded by saying it’s prepared to “fight to the end.”
- Shares in Europe rebounded from the worst three-day loss in five years, while US equity-index futures pointed to gains on Wall Street after Monday’s dizzying swings.
- Treasuries advanced after Monday’s sharp selloff, while oil gained while Gold climbed for the first time in four days.
Interest Rate Cut Bets: A Shift in Expectations
The US Federal Reserve’s stance on interest rates has been a subject of interest for traders, with expectations shifting rapidly in recent days. According to the CME FedWatch tool, the chances of an interest rate cut by the Fed in May’s meeting now stand at 31.7%, down from nearly 50% on Monday. For June, the chances of a rate cut are 96.9%, with a slim 3.1% chance for no rate cut at all.
- 70 countries have asked to enter in negotiation talks with the US.
- Treasury Secretary Scott Bessent said that already 70 countries have asked to enter in negotiation talks with the US.
- President Trump will personally be involved in the trade talks.
| Country | Request |
|---|---|
| West Australia’s Gold Road Resources | Scooping up Gold |
| 70 countries | Entering in negotiation talks with the US. |
Meanwhile, traders are taking a closer look at the data released by West Australia’s Gold Road Resources, which suggests that the company’s flagship asset may hold more gold than initially thought. The scoping study indicates that the open-pit mine could hold more ounces underground that can be tapped profitably, making a $3.3 billion takeover bid from its joint venture partner undervalued.
Gold Price Technical Analysis
The gold price chart reveals a familiar pattern of resistance and support, with the $3,000 mark serving as a key support level. Resistances are spread out, with the first cap at $3,040, followed by $3,057, a pivotal level since March 20. Further up, the R2 resistance at $3,097 precedes the current all-time high at $3,167.
“Gold, known as a safe haven asset, is unable to withstand selling pressure when market turmoil spreads to all asset classes, as seen in the past few days. That is something to keep in mind, meaning that the precious metal will not recover back to the all-time high at $3,167 in a straight line, as trade war tensions are set to take place from here on out.”
The gold price has gained nearly 1% intraday, trading just above the $3,000 mark. The bounce is supported by a combination of technical and geopolitical factors, with the US and China’s tit-for-tat war dominating the headlines.
Highlights and Definitions
The gold price has reached a critical juncture, with the metal trading just above the $3,000 mark. The bounce is a testament to the enduring appeal of gold as a safe-haven asset, even in the face of escalating trade tensions and market volatility.
- Gold prices have gained nearly 1% intraday, trading just above the $3,000 mark.
- The bounce is supported by a combination of technical and geopolitical factors, including the US and China’s tit-for-tat war.
- 70 countries have asked to enter in negotiation talks with the US.
- Tit-for-tat war: A situation where one party responds to another party’s action with a similar action, resulting in a cycle of retaliation.
- Safe-haven asset: An investment that is seen as a safe bet during times of market turmoil or uncertainty, often providing a hedge against inflation or economic downturns.
Conclusion
The gold price has made a strong comeback after a tumultuous Monday, trading just above the $3,000 mark. The bounce is a testament to the enduring appeal of gold as a safe-haven asset, even in the face of escalating trade tensions and market volatility.
