Gold prices have seen a decline after reaching an all-time high of $3,004, dropping to $2,982, which marked a loss of 0.21%. Uncertainty surrounding US trade policies and a weakening US Dollar are influencing this shift.
Geopolitical tensions, particularly the Ukraine-Russia ceasefire situation, also affect gold demand. Meanwhile, China’s central bank has increased its gold reserves for the fourth consecutive month, as reported by the World Gold Council.
Us Economic Conditions And Gold
Concerns about a potential US recession have led to a decrease in the US Dollar, with expectations that the Federal Reserve might ease policy by 66 basis points in 2025. Recent data revealed a low reading in the University of Michigan Consumer Sentiment Index, amid rising inflation projections linked to tariffs.
Looking forward, essential economic reports, including Retail Sales and housing data, will be released next week, coinciding with the Federal Reserve’s monetary policy decisions. Traders are anticipating key resistance levels at $3,050 and $3,100, while the initial support is at $2,950.
Gold is recognised as a safe-haven asset and a hedge against inflation. In 2022, central banks added 1,136 tonnes of gold to their reserves, the highest annual purchase on record, with countries like China, India, and Turkey rapidly increasing their holdings.
Gold And The Us Dollar Relationship
The price of gold typically moves inversely to the US Dollar and is influenced by geopolitical stability and economic downturn fears. A strong US Dollar tends to suppress gold prices, whereas a weaker Dollar can lead to increases in gold valuation.
