Gold fell on Friday with modest follow through US Dollar Purchasing interest.
The gold price (XAUUSD) is on the Defensive coming into Friday’s European session, trading roughly $2,175 below the previous day’s record high. The US Dollar (USD) Strengthens its overnight rebound from a one week low. In response to the US Economy’s positive outlook. This, along with Increased US Treasury bond yields. And the underlying positive tone across The global financial markets prove to be critical forces undermining the safe-haven precious metal.
The Fed’s planned three rate cuts in 2024 may restrict the USD and minimize losses in the metal.
However, any major corrective decrease in gold prices appears to be limited given the Federal Reserve’s (Fed) projection of a less restrictive policy stance. And an indication of a 75 basis point interest rate cut this year. This, in turn, lowers US bond yields. Ptentially capping gains for the Greenback and supporting the non yielding gold price. As a result, it is important to wait for strong follow through selling before confirming. That the XAUUSD has peaked and positioned for a further decline.
Traders are looking forward to Fed Chairman Jerome Powell’s speech for short-term possibilities.
Market players are now looking forward to Fed Chair Jerome Powell’s scheduled speech. For a boost later in the early North American session. Besides this, US bond rates will influence USD price dynamics. Which, combined with broader risk sentiment, should allow traders to capitalize on short term opportunities around the gold price. Nonetheless, the XAUUSD is expected to close in positive territory for the fourth time in the last five weeks.
Daily Market Movers: Gold price is pushed by slight USD strength and risk-on sentiment; downside appears restricted.
The US dollar is expected to build on the previous day’s impressive recovery from a one week low. Reached in the aftermath of the FOMC decision, hurting the gold price on Friday.
Moreover The Federal Reserve increased its economic growth prediction and now anticipates real GDP reaching 2.1% by the end of this year, as opposed to the previous In December, the estimate was 1.4%.
Furthermore, officials boosted the forecast for core inflation to 2.6% from 2.4%, and the unemployment rate is now expected to be 4% in 2024, somewhat lower than the prior projection of 4.1%.
The prognosis remains supportive of elevated US Treasury bond yields and is expected to function. As a tailwind for the USD. While the forecast less restrictive policies may limit the upside.
Furthermore On the economic front, the US Department of Labor (DOL) reported on Thursday that initial jobless claims fell to 210K. In the week ending March 16, down from 212K the previous week.
US Secretary of State Antony Blinken stated that gaps in continuing discussions aimed at establishing a cease fire in Gaza.
US Secretary of State Antony Blinken stated. That gaps in continuing discussions aimed at establishing a cease fire in Gaza. And releasing captives are decreasing, boosting investor confidence. Furthermore Fed Chair Jerome Powell’s address later in the early North American session will be watched for more clues regarding future policy choices. Which might provide a boost to the XAUUSD.
