- The Golden Price extends its downward direction to $ 3.025 at the Asian session on Monday.
- Ukraine undermines safe shelter assets such as hope and gold for the peace agreement.
- The Fed kept the ratios constant, but continued projections for two sections, which closed the disadvantage for gold.
The price of gold (XAU/USD) increases the decline in the early Asian session to $ 3,025 on Monday. The hopes of a Ukraine peace agreement on Thursday after reaching the highest level of all time, the edges of the precious metal are lower. However, the potential ratio interruptions given by the federal reserve (FED) and ongoing economic uncertainties may reversal for yellow metal.
On Sunday, Ukrainian and US officials held talks in Riyadh, Saudi Arabia, and President Donald Trump pushed for the cease -fire and continued their efforts to end the war. Ukrainian Defense Minister Rustem Umerov said that the weekend debate was “productive and focused”.
Umerov emphasized key points, including energy facilities and proposals for protecting critical infrastructure. US and Russian delegates are expected to have separate meetings on Monday. Surrounding the ceasefire of Russia and Ukraine, optimistic developments reduce the demand for gold, a traditional secure currency.
On the other hand, the possibility of further reduction can help limit the loss of gold. At that time, the FED kept interest rates constant at meetings in January and March due to more progress in dysflation. The US Federal Bank sees a high degree of uncertainty in economic view. Policy makers mean two interruptions in 2025, as updated last week.
FED President Jerome Powell said last week, US President Donald Trump’s policies, including import tariffs, may have slowed down the economic growth and increasing inflation of the US. “Gold, Retail does not even act as a safe asset to retail investors because we are not technically in a stagnation. We see slowing down in the economy and this can create more uncertainty and more secure assets.” He said.
Golden FAQ
Since gold is widely used as a means of value and change, it has played an important role in human history. Currently, in addition to its brightness and jewelry, precious metal is widely seen as a safe asset, that is, it is considered a good investment in turbulent times. Gold is also seen as a fence against currencies against inflation and depreciation because it is not based on a particular exporter or government.
Central banks are the largest gold holders. In order to support currencies in turbulent times, central banks tend to diversify and purchase gold to increase the perceived power of the economy and currency. High gold reserves can be a source of trust for a country’s payment power. According to World Gold Council data, central banks added 1,136 tons of gold worth about 70 billion dollars to their reserves in 2022. This is the highest annual purchase since the registrations started. Central banks of developing economies such as China, India and Türkiye are rapidly increasing their gold reserves.
Gold has an inverse correlation with both large reserves and safe assets, US Dollar and US treasures. The dollar tends to rise in the depreciation and allows investors and central banks to diversify their presence in turbulent times. Gold is also contrary to risk assets. While a rally on the stock market tends to weaken the gold price, sales in the risk markets tend to support valuable metal.
The price can act due to a wide range of factors. Geopolitical instability or a deep fear of stagnation can rapidly increase the price of gold due to safe protected status. As an inefficient asset, gold tends to rise with lower interest rates, while the higher cost of money usually gives weight on the yellow metal. Nevertheless, most moves depend on how the US dollar (USD) behaves as priced as dollar (XAU/USD). A strong dollar tends to control the gold price, while a weaker dollar raises gold prices.
