Gold price has attracted some buyers as US bond yields fall.
The gold price (XAUUSD) maintains a mildly upward tilt coming into the European session on Friday, but remains well within striking distance of the weekly low reached the previous day. Traders choose to remain on the sidelines ahead of the US Personal Consumption Expenditures (PCE) Price Index, which is scheduled for release later today. The critical inflation figures may provide some clues concerning the Federal Reserve’s (Fed) Future policy decisions will increase US Dollar (USD) demand and provide a significant boost to the non-yielding yellow metal.
Geopolitical uncertainties and an uncertain global economic outlook also help the metal.
Heading into the significant data risk, a further decrease in US Treasury bond yields keeps the USD on the defensive, below the highest level since December 13 reached on Wednesday, and works as a tailwind for the gold price. Aside from that, the potential of further escalation of geopolitical tensions in the Middle East, as well as an uncertain global economic picture, provide support for the safe-haven precious metal. However, declining odds of a more aggressive Fed policy easing in 2024 prevent bullish traders from placing new wagers on the XAUUSD, limiting gains.
Daily Market Movers: Gold. Price awaits US PCE Price Index for indications on Fed’s rate-cut path.
The benchmark 10-year US Treasury yield falls further from a one-month high reached last week, supporting the gold price for the second consecutive day on Friday.
Data released on Thursday showed that the US economy grew at an annual pace of 3.3% in the fourth quarter of 2023, exceeding consensus expectations of 2.0%.
Further details of the report revealed that the core PCE Price Index remained steady between September and December, implying that inflation pressures are easing.
This supported the belief that the world’s largest economy is more likely to avoid a recession and masked a jump in the US Weekly Initial Jobless Claims, to 214,000. Last week.
Separately, the US Census Bureau said that US durable goods orders were steady in December, while new orders excluding transportation and military grew by 0.3%.
Investors remain concerned that the Israeli-Hamas conflict could spark a larger regional crisis as numerous states and armed organizations continue to threaten each other’s lands.
Furthermore, economists forecast the global economy to decline in 2024, which is viewed as another factor favoring the safe-haven precious metal.
Delayed Fed rate cut bets limit the upside ahead of the release of the US PCE Price Index.
Meanwhile, market investors are unsure when the Federal Reserve would begin cutting borrowing prices, despite the fact that the domestic economy is currently strong.
Traders now turn to the US Personal Consumption Expenditures Price Index for clues regarding the Fed’s future policy decisions and to predict the near-term The XAUUSD exchange rate trajectory.
