Gold price attracts some dip-buying, but there is little follow-through, and it remains below $2,500.
The gold price (XAUUSD) regained upward traction throughout the Asia session on Friday, recovering further from the weekly low reached the previous day.
Dovish Fed predictions lead to some USD selling, which, along with geopolitical worries, provides support.
The attempted rebound of the US Dollar (USD) from its year-to-date low on Wednesday has run out of steam, with growing consensus that the Federal Reserve (Fed) will begin its polilyq easing cycle in September. This, in turn, seen as a critical component acting as a tailwind for the non-producing yellow metal.
Aside from that, continuous geopolitical concerns resulting from ongoing conflicts in the Middle East bolster the safe-haven gold price.
The upside appears limited as traders eagerly await Fed Chair Jerome Powell’s address later this Friday.
However, the Gold remains below the crucial level of $2,500 as traders await Fed Chair Jerome Powell’s address at the Jackson Hole Symposium for clues on the rate-cutting path. This will boost USD demand in the short term and provide a new impetus to the precious metal.
Daily Market Movers: Gold price benefited from moderate USD depreciation as traders await Powell’s speech.
Gold price (XAUUSD) regained upward traction throughout the Asia session on Friday. The US Dollar produced a goodish rally from the 2024 low struck the previous day amid recovering US Treasury bond rates, driving flows away from the gold price On Thursday.
The attempted USD recovery lacks follow-through after betting on the Federal Reserve’s rate-cutting cycle beginning in September, which helps minimize losses for the XAU/USD.
On the economic front, the US Department of Labor (DoL) announced that initial jobless claims increased to a seasonally adjusted 232,000 in the week ending August 17, up from 228K the week before.
This comes after the annual benchmark review of employment data released on Wednesday, which revealed that US firms added 818,000 fewer jobs than reported for the year through March.
FOMC meeting revealed that an increasing number of officials supported a rate cut next month.
Furthermore, the minutes of the July 30-31 FOMC meeting revealed that an increasing number of officials supported a rate cut next month, citing progress in lowering inflation.
The The S&P Global flash PMI showed that business activity in the US manufacturing sector contracted at the highest rate this year, while the gauge for the services sector surprisingly rose.
The composite PMI showed that business activity in the US private sector continued to grow at a strong rate, with selling price inflation falling to levels near to the pre-pandemic average.
Kansas City Fed President Jeffrey Schmid stated. That there still work to be done to stably return inflation to 2%. And that he needs to see more data before backing the decision to lower interest rates.
Philadelphia Fed President Patrick Harker stated. That the revisions to the jobs market were not unexpected and that he supported a September interest rate.
Cut as long as the data meets expectations.
Separately, Boston Fed President Susan Collins stated that it will soon be acceptable to begin decreasing rates since inflation indicators are consistent with increased confidence that inflation will return to 2%.
The market’s focus now shifted to Fed Chair Jerome Powell’s speech. Which will be analyze for clues about the interest rate trajectory. And provide a new directional impetus to the yellow metal.
