Why did gold prices fail to overcome the danger zone? What are the expectations?

Gold prices continue their stability near the level of $ 3350 an ounce, amid the anticipation of traders for any penetration that may push prices towards the danger zone. In light of the trade optimism between the United States and China and the movements of the US dollar, gold expectations remain mortgaged to the upcoming economic data and monetary policies.

Commercial optimism presses gold prices

The growing optimism about reaching a trade agreement between the United States and China contributed to pressure on gold prices. The price of the ounce declined to about 3335 USD, as the demand for safe haven assets decreased, amid a limited recovery of the US dollar, according to the FXSTREET platform.

Also read: Why is gold a good safe haven despite its high prices?

China reduces customs restrictions to support markets

China has strengthened the feelings of optimism in the market by announcing the exemption of some American imports from customs duties, which were 125%. However, Beijing rushed to deny US President Donald Trump’s statements that negotiations are going “positively”, which brought some caution to the markets.

Decreased demand for gold with calming tensions

US Treasury Secretary Scott Besent said that the talks with China are continuing, but he stressed that Beijing should take the first step due to the trade balance. This mitigation of tensions between the two largest economies in the world has led to a decrease in the demand for gold and other safe haven assets, while supporting the US dollar’s rise declining prices.

Also read: Gold in a week .. price stability and gains at the conclusion of transactions despite fluctuations

Analysts: Commercial optimism weakens the demand for gold

Tim Water, the chief market analyst at KCM Trade, confirmed that the positive statements from the White House have been optimistic about the possibility of reaching a trade agreement, which negatively affected the demand for gold as a safe haven.

Expectations to reduce interest rates may support gold soon

On the other hand, some analysts indicate that increasing expectations regarding the reserves of the Federal Reserve Appeals a course reduce interest rates, starting from the next June meeting, may enhance gold prices. This comes in light of the quiet media policy of the federal until the meeting of the Open Market Committee on May 7.

What do traders monitor this week?

Investors focus on the upcoming US economic data, especially the initial report of the GDP for the first quarter, and the recruitment data for April. Expectations indicate that the American economy is about 135,000 jobs with the stability of the unemployment rate at 4.2%.

Any economic data is weaker than expected that may lead to a decrease in the US dollar, providing additional support for gold prices in the short term.

A look at gold prices expectations

Gold markets registered a slight price gap at the beginning of the week, before declining again. Analysts believe that gold is currently going through a stage of logical stability, given the prevailing economic and political factors.