Gold price has regained positive momentum in response to Iran’s strike on Israel over the weekend.
Gold (XAUUSD) attracted some dip buying on the opening day of a new week. Halting its retracement decline from a new all time high reached on Friday around $2,431-2,432. Iran’s attack on Israel over the weekend increased the prospect of future Middle Eastern conflict. Benefiting the traditional safe-haven precious metal. Aside from this, sluggish US Dollar (USD) price action is perceived as Another reason supporting the commodity.
The upside remains limited due to aggressive Federal Reserve views and a bullish USD.
Meanwhile, investors have pushed back estimates for the Federal Reserve’s (Fed) first rate hike from June to September. Citing stil sticky inflation. This continues to support rising US Treasury bond yields. Allowing the US Dollar (USD) to remain near the year to date high reached on Friday. And acting as a headwind for the non yielding Gold price. Traders are now looking to US macro data and Fedspeak for short-term momentum later in the North American afternoon.
Daily Market Movers: Gold price draws some haven flows amid Iran Israel crisis; bullish USD acts as a headwind.
Iran’s unprecedented direct attack on Israeli territory elevated the prospect of a broader regional conflict Middle East. Which, in turn, helps the safe-haven gold price regain some positive momentum on Monday.
Israeli leaders support retribution, but the US has stated that it will not participate in any aggressive action against Iran. Limiting any immediate market reaction and curbing future gains for the XAUUSD.
The US Retail Sales and Empire State Manufacturing Index are being watched for short-term momentum.
Following the release of higher-than-expected US consumer inflation numbers last week, investors revised their estimates for the Federal Reserve’s first interest rate drop to September from June.
Furthermore, traders are already pricing in the potential of less than two rate cuts in 2024, compared to the Fed’s projection of three, allowing the US Dollar to remain near its high since early November.
The Federal Reserve’s hawkish view , combined with the strong USD, may deter bulls from initiating aggressive bets around the precious metal ahead of the US data – Retail Sales and the Empire State Manufacturing Index.
