Gold price falls to a new weekly low given the underlying positive tone around the USD.

The gold price (XAUUSD) fell to a new weekly low on Wednesday. But managed to defend and bounce off the 50-day Simple Moving Average (SMA) support during the early European session. However, the precious metal is in the negative for the second day in a row. As bets on an early interest rate cut by the Federal Reserve (Fed) fall. This is still supportive of elevated US Treasury bond yields. It raises the US Dollar (USD) to its highest level since December 13. Potentially damaging the non-yielding yellow metal.

Geopolitical threats and China’s economic troubles minimize the negative impact on the safe-haven metal.

However, geopolitical worries, combined with China’s disappointing economic growth data. Provide some support for the safe-haven gold price and help limit further losses. This, in turn, makes it recommended to wait for a sustained break of the aforementioned support before putting new negative wagers on the XAUUSD.

Market players are now looking to the US economic calendar, which includes the release of monthly retail sales and industrial production numbers. Aside from that, Fedspeak will have an impact on the USD and provide the precious metal a boost.

Daily Market Movers: Gold price declines due to Fed rate drop uncertainties and a lower risk tone. limits losses.

Governor Christopher Waller of the Federal Reserve (Fed) spoke on Tuesday, dampening hopes for a March rate cut and weighing on the non-yielding gold market.

Waller added that the Fed must be cautious and cannot rush into rate decreases while the economy remains strong, sending US Treasury bond yields significantly higher.

The yield on the benchmark 10-year US government bond remains over 4.0%, supporting the US dollar and capping the non-yielding yellow metal.

The possibility of further escalation of tensions in the Middle East does little to calm the safe-haven XAUUSD or appease optimistic investors.

In the newest development, the US conducted another airstrike targeting a Houthi missile complex. in Yemen, citing a threat to trade vessels and US Navy ships.

According to official figures issued by the National Bureau of Statistics (NBS), China’s economy expanded at a 5.2% annual pace in the fourth quarter of 2023.

In Q3, Chinese GDP increased by 1.0% vs the predicted 1.0%, while December Retail Sales and Industrial Production increased by 7.4% and 6.8%, respectively, year on year.

Following the release of the high-impact data, the NBS stated. That China’s economy faced a difficult external environment, with low consumer prices reflecting insufficient domestic demand.

The geopolitical dangers, combined with China’s economic troubles, may deter. Traders from taking strong bearish wagers on the metal, limiting any additional losses.

Now, traders are looking to The US macro data is expected to reveal. That monthly retail sales increased by 0.4% in December while industrial production stayed steady.

Aside from that, forthcoming lectures by Fed Governors Michael Barr. And Michelle Bowman may influence the USD and provide some traction for the commodity.