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XAU/USD, GOLD
Gold prices experienced a notable surge of over 1% on Tuesday, with the precious metal benefiting from a recovering U.S. dollar that paradoxically fell to its lowest level in three years as measured by the US Dollar Index (DXY). This counterintuitive movement highlights golds traditional role as a safe-haven asset, gaining when theres broad uncertainty or weakness in the dollar. At the time of this report, the spot price of gold (XAU/USD) was trading at $3,340, marking its highest level in four days. A significant political development contributing to market dynamics was the U.S. Senates approval of President Trumps sweeping tax bill. Bloomberg reported that the "Senate members approved the draft law by a majority of 51 votes compared to 50 votes," with Vice President J.D. Vance casting the decisive vote. This comprehensive package, now headed to the House of Representatives, encompasses $4.5 trillion in tax cuts and $1.2 trillion in spending reductions. While gold traders initially seemed to overlook the bills approval, the long-term implications, particularly concerning a potential exacerbation of the U.S. fiscal deficit, could support golds appeal as a hedge against economic instability. However, U.S. economic data released simultaneously did garner attention and largely reinforced the cautious, data-dependent approach articulated by Federal Reserve Chairman Jerome Powell. The Job Openings and Labor Turnover Survey (JOLTS) for May indicated a stronger-than-expected labor market, with the number of vacant job opportunities increasing and surpassing economists forecasts. In contrast, the Institute for Supply Management (ISM) reported that manufacturing activity, while showing signs of improvement and moving closer to the expansion-contraction threshold, remained in contractionary territory for the fourth consecutive month. These mixed signals provide the Federal Reserve with justification for its current measured stance.