Gold price has fallen for the third day in a row, weighed down by a strong US dollar.
The Gold price fell for the third consecutive day on Wednesday. Retreating further from a roughly one-month high at the $1,952-$1,953 level set last week. The XAUUSD fell to a one-week low during the Asian session. But failed to recover and is now trading at $1,925. Down less than 0.10% for the day.
Hawkish Fed views continue to support rising US bond rates and sustain the dollar.
There is a growing consensus that the Federal Reserve (Fed) will maintain interest rates low. Higher interest rates for a longer period of time boosts the US Dollar (USD) to its highest level since March 10. Hurting the gold price. At its September monetary policy meeting.
The Fed is largely expected to stop its rate-hiking cycle. Fed Governor Christopher Waller reinforced the bets on Tuesday. Saying that there is presently nothing that will necessitate a step toward raising short-term borrowing costs again. However, recent macro statistics from the United States (US) indicated that the pace of inflation remained stable. Indicating a highly strong economy. This should allow the Fed to maintain its current policy of restraint.
Indeed, markets are still factoring in the potential of a further 25 basis points. (bps) launch by the end of the year. This, in turn, continues to sustain rising US Treasury bond rates, which support the Greenback and contribute to a softer tone around the non-yielding Gold price.
The current cautious market environment may prevent Gold traders from making strong negative bets.
The negative, on the other hand, is mitigated by the prevailing cautious market atmosphere, which benefits the precious metal’s safe-haven position. A private poll released on Tuesday revealed that business activity in China’s services sector increased at its weakest pace in eight months, fueling fears about the world’s second-largest economy’s deterioration and dampening investors’ desire for riskier assets.
Aside from that, prolonged US-China trade tensions may push some haven flows to gold, acting as a tailwind. It is worthwhile. stating that US Secretary of Commerce Gina Raimondo does not expect any adjustments to the Trump administration’s tariffs imposed on China until the ongoing assessment by the US Treasury is completed. This suggests waiting for substantial follow-through selling before concluding that the current rebound from the $1,885 zone, or the lowest level since March 13, has run its course and initiating aggressive bearish wagers around the XAUUSD.
Traders are currently anticipating the announcement of the US ISM Services PMI, which may impact USD price dynamics and offer some momentum to the yellow metal.
