Gold price builds on the overnight rebound from the $1,946-$1,945 region.
The gold price builds on the overnight rebound from the $1,946-$1,945 region, or a multi-day low. And finds some upward impetus during Tuesday’s Asian session. The XAUUSD is now trading in the $1,957-$1,958 range, up slightly more than 0.10% on the day. And continues well within striking distance of a one-month high reached last Friday.
The US Dollar (USD) stays on the defensive, hitting its lowest level since April 2022. As predictions that the Federal Reserve (Fed) is nearing the end of its policy cycle grow. Indeed, market players appear to be confident. That the Fed will hold interest rates constant for the remainder of the year.
Following the widely expected 25 basis point (bps) hike in July. This, in turn, weighs on the US dollar. Which is considered as a significant element supporting the US dollar-denominated gold price.
The XAUUSD’s gains have been capped by uncertainty over the Fed’s rate rise path.
Investors, on the other hand, suspect that the Fed would commit to a more dovish policy posture. Preferring to adhere to its prediction of a 50-basis point rate rise this year. This serves to limit the downside for US Treasury bond rates. And should operate as a tailwind for the USD, limiting any major upside for the price of non-yielding gold.
Aside from that, the overnight gain in US equities markets may further discourage traders from taking new bullish wagers and help to keep the safe-haven precious metal under control, at least for the time being.
Even from a technical standpoint, the range-bound price action seen over the last four days indicates traders’ uncertainty about the gold price’s near-term trend. This makes it even more wise to wait for persistent strength above the $1,963-$1,964 level, or the one-month top, before positioning for any additional upward movement.
Traders are now looking forward to the US monthly Retail Sales and Industrial Production numbers, which will be released later in the North American session.
