Gold prices are rising slightly due to global trade tensions, which increase demand for gold as a safe investment. The XAU/USD pair is currently trading around $3,325, influenced by tariffs on Brazil and copper goods. However, the increase in gold prices is limited by a rise in US 30-year bond yields, which are at 4.889%. The gold price has fallen below the 50-day simple moving average (SMA), but strong support is at $3,300. ### US Jobless Claims Data Recent US Jobless Claims data shows a strong job market. Initial claims are at 227,000, and continuing claims stand at 1.965 million. These numbers lower the chances of a Federal Reserve rate cut in July, which helps strengthen the US Dollar. The Federal Reserve’s meeting minutes indicate concerns about inflation from tariffs. Current market expectations suggest a 67.4% chance of a rate cut by September. Presently, interest rates are between 4.25% and 4.50%. President Trump announced a 50% tariff on copper imports and new taxes on Brazil, which could increase trade tensions. Technically, gold is under pressure at the 50-day SMA of $3,323, while support remains strong at $3,300. Rising interest rates reduce the appeal of holding gold, as higher rates increase opportunity costs. Looking at recent price trends, the uptick in gold prices is mainly due to uncertainty surrounding global trade policies. The new tariffs on Brazil and copper have made investors seek the safety of precious metals. The XAU/USD pair has risen but is still below the crucial 50-day SMA of approximately $3,323, a key level for short-term traders. Nevertheless, the rise in US Treasury yields is creating resistance. The 30-year bond yield, now at 4.889%, means that real returns on bonds are starting to compete with gold’s zero yield. This scenario presents a dilemma for investors: while gold seems safe, it doesn’t yield returns, which becomes a larger warning when real yields increase. Support around $3,300 is still intact, but further bullish movement may be limited while yields are high. ### Macroeconomic Picture The broader macroeconomic context is also important. Initial jobless claims remain low, signaling a robust labor market. With claims at 227,000 and nearly 2 million continuing claims, the tight job market reduces the pressure on the Federal Reserve to adjust monetary policy. This strengthens the US Dollar, putting downward pressure on dollar-denominated commodities. The Federal Reserve’s latest minutes mention inflation risks from import duties but maintain a cautious tone. However, futures markets are already forecasting a rate cut by early autumn, with expectations now at nearly 68% for a cut by September. This creates a gap between resilient data and market pricing, which may lead to increased volatility in derivatives linked to interest rates and commodities. From a technical perspective, the resistance around the 50-day SMA is a crucial point to watch. We’ve seen reactions near $3,323, an area of previous congestion. The key support level of $3,300 has held firm multiple times, making it critical for those managing risk on the downside. In terms of trade policy, Washington’s decision to impose a 50% tariff on copper could lead to inflation concerns, especially if similar measures are expanded or reciprocated. The administration’s rhetoric heavily influences market sentiment, particularly for industrial metals and inflation-sensitive products. In the upcoming sessions, we may see the market fluctuate between geopolitical fears and macroeconomic strengths pushing against lower expectations for rates. For those active in derivatives trading, the current environment offers opportunities, but success requires discipline in entry points and the ability to adapt to changes in rates and commodity demand. Understanding the true costs of investing, especially as yields change, will be crucial for making medium-term decisions. Create your live VT Markets account and start trading now.

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