Gold attracts new offers and reverses a significant portion of the overnight losses.
The gold price (XAUUSD) regains strong momentum on Thursday. Reversing a significant portion of the previous day’s slide from the weekly high.
The precious metal, on the other hand, has been trapped in a similar trading band for the past week or two. As traders wait for a new catalyst. Before positioning for the next leg of a directional move. As a result, the emphasis will be focused on Friday’s release of the US Core Personal Consumption Expenditure (PCE) Price Index. Which may impact the Federal Reserve’s (Fed) future policy decision. This, in turn, should assist establish the non-yielding commodity’s near-term direction.
Dovish Fed forecasts keep USD bulls on the defensive and support the metal.
Meanwhile, mounting expectations that the US Federal Reserve may abandon its aggressive approach early next year continue to damage. The US Dollar (USD) and offer some support to the Gold price. In fact current market pricing suggests that the Fed will begin reducing interest rates as early as March 2024. This is backed up by the recent drop in US Treasury bond yields to multi-month lows. Aside from that, there is a milder risk tone. The safe-haven XAUUSD is benefiting ahead of the final Q3 GDP print. Weekly Initial Jobless Claims, and the Philly Fed Manufacturing Index. Which are all coming later in the North American session.
Daily Market Movers: The gold price stays limited to a typical range ahead of US macro data.
Rising expectations that the Federal Reserve will abandon its aggressive approach early next year prove to be a crucial element acting as a tailwind for the gold market.
Dovish Fed predictions drive the 10-year US government bond yield to its lowest level since July. Putting US Dollar bulls on the defensive.
A wave of Fed members recently attempted to cast doubt on the notion of fast interest rates. Rate cuts next year, however insignificant, provided little impetus to the buck.
The Conference Board’s US Consumer Confidence Index rose to a five-month high of 110.7. In December from 101 in November, the highest level since early 2021.
Existing house sales in the United States unexpectedly increased by 0.8% in November. To a seasonally adjusted annual pace of 3.82 million units, ending a five-month decrease.
The overnight remarkable turnaround in US equities markets is viewed as another reason that supports the safe-haven precious metal and continues to support the increase.
Traders are now anticipating the final US GDP print, which is expected to reveal that the world’s largest economy grew at an annualized rate of 5.2% in the third quarter.
The US economic data released on Thursday Later in the US session, the Weekly Initial Jobless Claims data and the Philly Fed Manufacturing Index will be released.
Meanwhile, the attention remains on the Core PCE Price Index, which is due on Friday and will impact the Fed’s future rate decisions and instill volatility in the markets.
