Gold Rises to New Weekly High After Trump's Conciliatory Signal
Gold (XAU/USD) attracted buyers for the third consecutive day, reaching its highest level in one and a half weeks during the Asian session on Tuesday (March 31). However, it struggled to hold above $4,600 per ounce. The price increase was triggered by reports that US President Donald Trump was willing to end the military campaign against Iran, even though the Strait of Hormuz remained largely closed. This statement triggered a decline in crude oil prices, which in turn eased inflation concerns and depressed US bond yields, thus prompting profit-taking against the USD and benefiting gold.
However, Iran has shown hesitation to engage in direct negotiations with the US, highlighting the fragile nature of diplomatic progress. Furthermore, the US is still sending additional troops to the region, adding to uncertainty and dampening hopes for a de-escalation of tensions in the Middle East. This should support crude oil prices and keep inflation risks at bay, which in turn strengthens bets for a global interest rate hike, which could limit gold's gains.
Traders now appear to have completely discounted the possibility of further interest rate cuts from the US Federal Reserve, instead increasing bets for a rate hike later this year. This outlook supports the emergence of dip-buying in the USD, which could limit gold price gains. Therefore, traders are advised to wait for strong follow-through buying before positioning for the recent solid recovery from the 200-day simple moving average (SMA) around $4,100, a four-month low recorded last week.
Meanwhile, traders are now turning their attention to the upcoming release of US economic data, including the JOLTS Job Openings report and the Conference Board's Consumer Confidence Index. This data, along with speeches by influential FOMC members, is expected to influence USD movements and provide a boost to gold prices. However, market focus remains on geopolitical developments, which will continue to play a significant role in generating volatility in the XAU/USD pair.
With geopolitical tensions lingering and expectations of hawkish monetary policy, gold prices are expected to remain vulnerable to fluctuations. Therefore, attention should be paid to further developments in the Middle East as well as the interest rate policies adopted by other major central banks. (asd)
Source: Newsmaker.id
