Gold expected to consolidate in a narrow trading area above $2,000 on Friday.
During the Asian session on Friday, the gold price (XAUUSD) struggles to build on the previous day’s bullish gain. Oscillating in a narrow range above the $2,000 psychological threshold.
Rising US bond yields support the dollar and limit the price of gold in an environment of rising risk appetite.
A minor increase in US Treasury bond yields helps reinvigorate the demand for the US dollar (USD). Which, combined with a generally bullish tone around the equities markets. Turn out to be crucial reasons capping the Advantages for the safe-haven precious metal.
Reviving expectations on an early Fed rate cut, as well as geopolitical worries, help strengthen the commodity.
However, predictions that the Federal Reserve (Fed) will begin decreasing interest rates soon. Boosted by the weaker than expected US Retail Sales report issued on Thursday. Provide a tailwind for the non-yielding yellow metal.
Aside from that, the risk of escalating geopolitical tensions in the Middle East may continue to support the gold price. Even from a technical standpoint, this week’s failure to achieve bearish. Acceptance below the 100-day Simple Moving Average (SMA) calls for some caution before positioning for any significant loss in the XAUUSD. Market participants are now looking forward to the US economic calendar. Which includes the Producer Price Index (PPI). Housing Starts, and the Michigan Consumer Sentiment Index. This, combined with speeches by Influential FOMC members will drive the USD and provide a boost to the commodity.
Daily Market Movers: Gold price lacks solid intraday direction amid mixed fundamental indicators.
A mix of opposing causes fails to help the gold market capitalize on this week’s small recovery from its lowest point since November 13.
The yield on the benchmark 10-year US government bond remains over 4.0%, boosting USD demand and restricting the upside for the XAUUSD.
Thursday’s dismal US news raises chances for an early Fed rate decrease and enhances market confidence, further hurting the safe-haven gold.
Bets on a 25 basis point rate cut in May increased to 40%, while the odds for a move in June were at80% following the release of disappointing US retail sales figures.
The Commerce Department announced that retail sales fell substantially by 0.8% in January, while sales excluding autos fell by 0.6%.
According to a second survey, import prices rose by 0.8% in January, the largest increase in nearly two years, but the annual rate declined 1.3%.
Meanwhile, jobless claims fell by 8K from 220K the previous week to a one-month low of 212K for the week ending February 10.
Atlanta Fed President Bostic said on Thursday that the US central bank has made significant headway in decreasing inflation and will soon consider dropping interest rates.
Bostic noted that a healthy economy begs for patience in modifying monetary policy, which the Fed does. not face the need to reduce interest rates.
Israeli military announced on Wednesday that its fighter jets had launched a series of strikes in Lebanon.
The Israeli military announced on Wednesday that its fighter jets had launched a series of strikes in Lebanon, heightening the prospect of a larger Middle East battle.
Traders are now looking to the US Producer Price Index for clues regarding the Fed’s future policy decisions and rate-cut path, which might give further momentum.
Housing Starts and the Preliminary Michigan Consumer Sentiment Index for February are also scheduled for release on Friday on the US economic calendar.
This, combined with remarks by important FOMC members, will increase USD demand and create short-term chances around the XAUUSD.
