Gold prices manage to stay above a multi week low reached on Monday.
On Tuesday, the gold price (XAUUSD) drew some sellers and fell to the $2,316-2,315 range, bringing it closer to a multi week low reached the day before in the aftermath of minor US Dollar (USD) strength.
Fed rate cut bets stifle the attempted USD recovery and offer support to the metal.
The attempted USD recovery from almost a two-month low, however, failed follow-through due to growing agreement that the Federal Reserve (Fed) will start decreasing interest rates later this year. , boosted by worse US macroeconomic statistics. The expectations have kept US Treasury note yields low, which is expected to help the non-yielding yellow metal during Wednesday’s European session.
Aside from that, geopolitical worries arising from ongoing conflicts in the Middle East push the safe-haven gold price back towards the 50-day Simple Moving Average (SMA). Despite a number of supportive reasons, the XAUUSD remains stuck in a one-week-old trading range, as investors appear hesitant to put aggressive directional bets and instead prefer to wait for the release of the critical US monthly employment data, or the Nonfarm Payrolls (NFP) report, on Friday. Meanwhile, the US ADP report on private-sector employment and the US ISM Services PMI could provide some information. impetus later today.
Daily Market Movers: Gold price gains boost from lower USD; Fed rate decrease wagers.
The US dollar recovered modestly from a two-month low reached on Tuesday, putting downward pressure on the gold market, as gloomy US macro data helped limit losses.
According to the JOLTS report, job postings decreased more than predicted in April, dropping 296K to 8.059 million, the lowest level in more than three years.
This comes after the disappointing release of the US ISM Manufacturing PMI on Monday, which revealed unexpected deterioration in business activity and pointed to indicators of a weakening US economy.
Meanwhile, there is a possibility that the US economy may be slumping further. than expected solidified bets on the Federal Reserve’s September rate cut, driving US Treasury bond yields lower.
The rate-sensitive two-year US government bond and the benchmark 10-year Treasury yield remain near two-week lows, limiting the USD and supporting the non-yielding yellow metal.
Traders are now looking for a boost from the US ADP report and the ISM Services PMI.
Traders are now looking ahead to Wednesday’s US economic calendar, which includes the release of the ADP report on private-sector jobs and the ISM Services PMI, to seize short-term chances.
However, the attention remains on the official monthly employment statistics, also known as the Nonfarm Payrolls report, which will define the next leg of the XAU/USD’s directional move.
