Gold remained around its lowest level since June, despite a strong US dollar.
The gold price struggles to find traction during the Asian session on Tuesday, remaining near its lowest level since June 6. Which was reached the previous day. The XAUUSD manages to stay above $1,900 for the time being. However the bias remains in favor of negative traders. Supporting possibilities for a continuation of the recent downward trend seen over the last four weeks or so.
Bets for another Federal Reserve rate rise continue to bolster the greenback.
The US Dollar (USD) remains stable close below. It has reached its highest level in over two months. And appears to be a significant factor hurting the gold price. Growing assumption that the Federal Reserve (Fed) will maintain interest rates higher for extended periods of time supports increased US Treasury bond yields. And acts as a tailwind for the US dollar. Indeed, market investors are persuaded. That the Fed will maintain its hawkish posture and have priced in the probability of another 25 basis point (bps) hike before the end of the year.
The incoming macro data from the United States (US) increased bets, suggesting. That the struggle to return inflation to the Fed’s 2% objective is far from over. The Consumer Price Index for the United States. The Consumer Price Index (CPI) revealed a slight increase in consumer prices in July last week. In addition, the US PPI rose somewhat more than predicted. Supporting the Fed’s chances for additional tightening. This lifted the benchmark 10-year US government bond yield to a nine-month high on Monday, lending support to the USD.
China’s economic troubles help the safe-haven XAUUSD to defend $1,900, at least for the time being.
Meanwhile, rising US bond rates appear to be weighing on the non-yielding gold price, albeit concerns about the global economy, particularly in China, assist limit the fall. Fears in the market were exacerbated by poor Chinese statistics released on Tuesday, which indicated that Retail Sales and Industrial Production rose less than expected in July. This overshadows the People’s Bank of China’s (PBoC) unexpected rate decreases and does nothing to increase investor confidence, benefiting the safe-haven precious metal.
Market players are now anticipating the publication of monthly Retail Sales statistics and the Empire State Manufacturing Index later in the early North American session. This, together with US bond rates, may impact USD price dynamics and offer some impetus to the Gold price. Aside from that, general risk mood may lead to the creation of short-term trading chances. Nonetheless, the fundamental background appears to be slanted in favor of negative traders.
