Gold At Lows Due To Profit Taking

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Gold At Lows Due To Profit Taking

Gold At Lows Due To Trade War And Profit Taking

Gold (XAU/USD) prices are lingering at weekly lows amid profit taking and trade war fears. Most of it is coming from the uncertainty over Trump's plans of tariff.

For now, the Gold (XAU/USD) is under the $3,000 handle and will likely stay like that for a while. A look at the Gold futures also shows that it is trading under $3K.

Dips In Gold Prices Are Opportunities

According to an analyst from the RJO Futures, the profit taking is also a reason why Gold (XAU/USD) is moving lower. It seems investors are now exiting their positions and going to the sidelines before things get clear.

It is highly likely that the Gold (XAU/USD) traders will enter again but at a lower price range. But, we also need to understand that Gold (XAU/USD) has already made record highs several times in 2024.

But, how are the tariffs affecting the Gold? Well, tariffs are supposed to strengthen the US Dollar. In turn, this will make the Gold a less favorable option.

Also, the tariffs could stop the Fed from lowering the rates. Once again, this makes the USD a better option as compared to the Gold.

An analyst at Zaner Metals added that there is a great deal of uncertainty over trade and tariffs. He also highlighted that any dips in the Gold prices should be considered a buying opportunity.

Meanwhile, experts believe the Federal Reserve will respond systematically and strongly to changes in the labor market and inflation.

Higher inflation will make it difficult for the Fed to lower the rates. In turn, this will tarnish the appeal of Gold as it is a non-yielding asset.

The next inflation prints from the USA will also have a long-lasting impact on the Gold prices. Lower inflation will be beneficial for the Gold while higher print will push the Gold lower towards $2500 and $2000.

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