- The price of gold rises to around $ 3,245 in the first Asian session on Monday.
- Uncertainty about US tariffs drives safe refuge flows, supporting the price of gold.
- The US NFP increased by 177,000 in April compared to the 130,000 expected.
The price of gold (Xau/USD) quotes in positive territory about $ 3,245 during the first Asian session on Monday. The renewed concerns about the recession in the US and the commercial relations between the US and China provide some support for refuge assets such as gold. The purchasing managers index (PMI) of the US ISM services for April will be at the Center for Care later on Monday.
While the Chinese Ministry of Commerce indicated that Beijing was considering an US offer to hold conversations about 145% tariffs of President Donald Trump, the two parties still seem to be far from an agreement. Trump avoided answering the question of whether there will be commercial agreements this week, saying that ‘could there be. Uncertainty around tariffs drives safe refuge flows, benefiting precious metal.
The growing bets that the Fed will cut its interest rate in June increase the attractiveness of gold, which does not yield. “The labor report leaves a few doubt that the FOMC will keep the rates unchanged this week, and the barrier for a cut is now even higher for June,” said Michael Feroli, head of the US economy in JPMorgan.
Non -agricultural payroll (NFP) in the United States (USA) increased by 177,000 in April, according to the US Labor Statistics Office (BLS) on Friday. This figure followed the increase of 185,000 (reviewed since 228,000) observed in March and exceeded the 130,000 market consensus. In addition, the unemployment rate remained unchanged in 4.2% in April, as expected, while the average time athlers were stable at 3.8% year -on -year in the same informed period.
Oro FAQs
Gold has played a fundamental role in the history of mankind, since it has been widely used as a deposit of value and a half of exchange. At present, apart from its brightness and use for jewelry, precious metal is considered an active refuge, which means that it is considered a good investment in turbulent times. Gold is also considered a coverage against inflation and depreciation of currencies, since it does not depend on any specific issuer or government.
Central banks are the greatest gold holders. In their objective of supporting their currencies in turbulent times, central banks tend to diversify their reserves and buy gold to improve the perception of strength of the economy and currency. High gold reserves can be a source of trust for the solvency of a country. Central banks added 1,136 tons of gold worth 70,000 million to their reservations in 2022, according to data from the World Gold Council. It is the largest annual purchase since there are records. The central banks of emerging economies such as China, India and Türkiye are rapidly increasing their gold reserves.
Gold has a reverse correlation with the US dollar and US Treasury bonds, which are the main reserve and shelter assets. when the dollar depreciates, the price of gold tends to rise, which allows investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rebound in the stock market tends to weaken the price of gold, while mass sales in higher risk markets tend to favor precious metal.
The price of gold can move due to a wide range of factors. Geopolitical instability or fear of a deep recession can cause the price of gold to rise rapidly due to its condition of active refuge. As an asset without yield, the price of gold tends to rise when interest rates lower, while the money increases to the yellow metal. Even so, most movements depend on how the US dollar (USD) behaves, since the asset is quoted in dollars (Xau/USD). A strong dollar tends to keep the price of gold controlled, while a weakest dollar probably thrusts gold prices.
On the other hand, the improved feeling of the market and a risk trade could drag the yellow metal downward and take benefits in the Safe Gold Refuge. Trump relieved the tensions with the US Fed, saying that he will not dismiss Jerome Powell as president of the Fed Board before he finished his mandate in May 2026. However, Trump reiterated his belief that the Fed should cut the interest rates at some point.
