Gold price regained some positive traction, albeit with little follow through buying.
Following the previous day’s minor decline. The gold price (XAUUSD) attracts some dip buyers and remains above $2,030 throughout Tuesday’s Asian session.
Sliding US bond rates weaken the USD and give support to the XAUUSD.
The US Dollar (USD) remains down as a result of a new leg down in US Treasury bond yields. And it appears to be a crucial element acting as a tailwind for the commodities. Furthermore, the cautious market sentiment is viewed. Benefiting the precious metal’s relative safe-haven status. However harsh Federal Reserve (Fed) views limit any future advances.
Investors currently appear to believe. That the Fed will maintain interest rates higher for longer due to persistent inflation and a solid US economy. This may discourage traders from placing excessive bullish wagers on the non yielding Gold price. Ahead of the release of the US Personal Consumption Expenditures (PCE) Price Index on Thursday. The critical inflation statistics will be scrutinized for clues about when the Fed will begin decreasing rates. Which will drive the USD and provide a new impetus to the XAUUSD.
Daily Market Movers: Gold price continues supported by minor declines in US bond yields and the US dollar.
The yield of The benchmark 10-year US government bond remains down at 4.275%. Hurting the US dollar and providing some support for the gold market.
A recession in Japan and the United Kingdom, as well as ongoing geopolitical concerns caused by Middle Eastern wars, benefit the safe-haven precious metal.
US President Joe Biden stated on Monday that he hopes for a cease-fire in the Israel-Hamas conflict as well as a pause-for-hostages agreement before Ramadan begins on March 10.
The FOMC meeting minutes released last week, as well as remarks made by many Federal Reserve officials, indicated that the US central bank was not in a hurry to lower interest rates.
Kansas City Fed President Jeffrey Schmid stated that the US central bank should be patient. And await clear evidence that the The war against inflation has been won.
Markets have all but priced out the probability of a rate cut in March. With a 60% chance of the first 25 basis point rate decrease occurring at the June FOMC meeting.
Traders are now focused on US macro data due on Tuesday, including Durable Goods Orders. The Conference Board’s Consumer Confidence Index, and the Richmond Manufacturing Index.
This week, investors will also see the release of the Prelim US Q4 GDP print on Wednesday and the Personal Consumption Expenditures (PCE) Price Index on Thursday.
The latter is regarded as the Fed’s favored inflation gauge. Which will affect expectations about future rate cuts and provide additional momentum to the Gold.
