Gold trade in the green for the third day in a row, approaching $2,650.
As the road to recovery continues for the third day in a row, the price of gold remains high early on Wednesday, aiming to reclaim the $2,650 barrier. Amid persistent geopolitical concerns between Russia and Ukraine, traders are now anticipating Nvidia’s earnings report and the forthcoming speeches from US Federal Reserve (Fed) policymakers. The price of gold looks to Fedspeak and geopolitics for new orders.
Gold rises due to geopolitical risks and a stable US dollar.
It appears that the US dollar (USD) finds new demand in Wednesday’s Asian trading, following the increase in US Treasury bond yields as overall market sentiment improves due to China’s stimulus hopes.
Following the People’s Bank of China’s (PBOC) inaction on the Loan Prime Rates (LPR), markets were wary earlier. Nonetheless, market sentiment is improving as a result of expectations that China will increase its stimulus program to support the economy.
Furthermore, there appears to be less concern about a further geopolitical escalation between Russia and Ukraine, which reduces risk appetite. But as of right now, gold buyers aren’t giving up, expecting a change in risk sentiment in the event that the financial markets experience a wave of risk aversion due to the disappointing earnings report from the American AI behemoth Nvidia Inc.
Additionally, the events involving Russia and Ukraine will be closely monitored maintaining the demand for the conventionally safe-haven price of gold.
Just days after US President Joe Biden permitted Ukraine to use American-made weapons to strike inside Russia, Russia’s defense ministry reported on Tuesday that Ukraine had fired six Army Tactical Missile Systems (ATACMS) missiles from the US at the Bryansk region.
In reaction to non-nuclear attacks on Russia, the Kremlin confirmed Tuesday that they had lowered the threshold for a potential nuclear strike.
Additionally, markets currently price in a 60% chance that the Fed will lower interest rates by 25 basis points (bps) in December, so Fedspeak will be useful in predicting the US central bank’s future interest rate trajectory.
