Gold stabilize and stops declining after reaching a multi week peak.

The price of gold (XAUUSD) begins the new year strongly. And has recovered most of the losses it suffered during the previous two trading days. As the European session begins, the precious metal maintains its moderate intraday gain. And is presently trading in the $2,075 range, up more than 0.50% on the day but still below a multi-week high reached last Thursday. Increasing recognition that the Federal reserve Geopolitical dangers. Worries about China’s shaky economic recovery, and the Federal Reserve’s (Fed) impending interest rate reductions. Which might begin as early as March, will all work in favor of the unyielding yellow metal.

XAUUSD pair is still supported by geopolitical uncertainties and dovish Fed predictions.

However, any additional rises for the price of gold may be restrained by the US Dollar’s (USD) continuing recovery from the five-month low it struck last week. Which is being supported by an increase in the rates on US Treasury bonds. In addition, given the comparatively low trading volumes. Market players appear hesitant and may decide to hold off on making directional bets until after the FOMC minutes on Wednesday. Important macro releases that are slated for the start of a new month are also part of this week’s packed US economic program, which should help to provide some real momentum . the priceless metal.

Daily Market Movers: A number of sustaining factors boost the price of gold.

The price of gold increased by 13% annually in 2023. Which was its strongest year since 2020. It now appears that the recent, well-established pattern of appreciation will continue.

The yellow metal is supported by expectations that the Federal Reserve would loosen policy as early as March and accomplish a soft landing for the economy in 2024.

There is a greater than 85% probability, according to the CME’s FedWatch tool. That the Fed will lower interest rates in March and by a total of 150 basis points (bps) by the end of the year.

The Middle East and Ukraine war’s geopolitical ramifications provide further credence to the safe haven precious metal. and China’s financial difficulties.

Following many attacks on various military and commercial vessels in the area. US forces retaliated against the Houthi militia. Which is supported by Iran, in the Red Sea.

By the end of 2023, there appeared to be minimal indications of a revival in manufacturing activity. According to the official Chinese PMI that was issued over the weekend.

Meanwhile, a private-sector survey released on Tuesday revealed. That while manufacturing activity in China increased more quickly in December, company confidence for 2024 remained low.

US Dollar is supported by rising US bond yields, which may limit future gains.

A further increase in US Treasury bond yields coincides. With the US Dollar’s recovery from a five-month low, which may limit future gains for the XAUUSD pair.

The benchmark 10-year US government bond’s yield continued to rise. From Its lowest point since July was reached last week, supporting the dollar.

For some significant stimulus, traders are now awaiting the release of the FOMC minutes on Wednesday. As well as significant US macro announcements, such as the NFP report.

The ADP data is due on Thursday, and the ISM Manufacturing PMI. And JOLTS Job Openings are scheduled for this week’s packed economic docket on Wednesday.