From Investing.com: 2025-05-07 04:36:00

Gold prices initially rose on Tuesday but declined overnight after India’s strike on Pakistan. The rise was driven by Chinese demand and a weaker USD. Analysts noted that historical wars didn’t impact gold prices much. The global factors, like the U.S.-China trade war and the slowing world economy, will continue to drive gold prices in the future. XAU/USD fell by 1.38% during Asian and European trading sessions, with heightened volatility expected today due to the Fed Interest Rate Decision.

The euro rose after Germany’s parliament elected Friedrich Merz as Chancellor, pressuring the U.S. dollar over trade deal fears. The market is nervous about the lack of formal announcements post the tariff reprieve. The Fed Interest Rate Decision today will be key, with a 25-bps rate cut already priced in. A hawkish 50-bps rate cut may lead to sideways movement, while a dovish stance could push EUR/USD above 1.16000.

The Japanese Yen declined for the third consecutive session, falling by 0.9%. Trade talks between the U.S. and Japan are being monitored closely, with Japan aiming to finalize a bilateral agreement soon. BoJ’s dovish stance on interest rates and revised growth forecasts suggest no rate hikes in the near future. USD/JPY rose by 0.44% during Asian and European sessions, with the Fed Interest Rate Decision expected to trigger market volatility today.



Read more at Investing.com: Gold Slips as Geopolitical Tensions Spike, Fed Decision in Focus