Gold prices draw buyers, snapping a two day losing skid from more than a month low.
The gold price (XAUUSD) ticked higher during the Asian session on Thursday. Appearing to have broken a two day losing skid to more than a one-month low set the previous day. The US Dollar (USD) falls from its highest level since December 13 due to profit-taking, which favors the commodities.
A generally milder risk tone provides support for the safe-haven gold amid muted USD price activity.
Meanwhile, an intensification of milita The Middle East. And concerns about protracted economic slowdown in China. The world’s second largest economy, continue to weigh on market mood. This is viewed as another reason that lends support to the safe haven precious metal.
However, any real recovery in the gold price remains elusive in light of diminished. Betting on an impending shift in the Federal Reserve’s (Fed) policy stance. In fact. Market investors reduced their expectations for an interest rate decrease in March following the announcement of positive US Retail Sales data on Wednesday. Which indicated a strong US economy. This, in turn, sustains elevated US Treasury bond yields and benefits USD bulls. Therefore, it would be smart to wait for substantial follow through buying. before verifying that the XAUUSD has reached a near-term bottom.
Daily Market Movers: Gold price gains support from milder risk tone, but lacks follow-through.
A small drop in the US dollar, combined with geopolitical concerns. And China’s economic troubles, helped the gold price draw some buyers near the $2,000 psychological barrier on Thursday.
Yemen-based Houthi rebels claimed their second attack this week on a US operated vessel in the Red Sea. And have warned to intensify attacks in reaction to the American and British strikes.
China’s economy expanded at an annual pace of 5.2% in the fourth quarter of 2023. Exceeding the official 5% target, but investors remain concerned due to rising deflationary threats and weak demand.
The data provided on Wednesday revealed. That the headline Retail sales in the United States climbed by 0.6% in December. Exceeding market expectations, while core sales excluding automobiles also improved.
The numbers show that consumer spending remains resilient. As does the underlying strength of the US economy, giving the Fed more leeway to keep interest rates higher for longer.
Furthermore, Fed Governor Christopher Waller stated on Tuesday that the central bank should not drop interest rates until it is evident that lower inflation would be sustained.
The benchmark 10-year US government bond yield remains comfortably over 4%, reaching its highest level since December 13, and should provide some support to the Greenback.
Traders are now looking to Thursday’s US economic docket, which includes the release of Weekly Initial Jobless Claims, The Philadelphia Fed Manufacturing Index and housing market data provide new encouragement.
