Gold struggling to capitalize on the previous day’s recovery from a more than one-month low.
During the Asian session on Friday, the gold price (XAUUSD) oscillated in a narrow trading range. And remained well within striking distance of a one-month low, near the $2,000 psychological barrier struck earlier this week.
Escalating geopolitical tensions support the safe-haven XAUUSD and should limit its fall.
Geopolitical tensions in the Middle East rose further as Pakistan launched retaliatory airstrikes inside Iran on Thursday. This is on top of US-Houthi confrontations in the Red sea. Combined with persisting concerns about sustained economic slowdown in China. Serves as a tailwind for the safe-haven precious metal.
Reduced bets on a March Fed rate drop put upward pressure on US bond yields, limiting gains.
Meanwhile, the US Dollar (USD) extends its sideways consolidative price move for the third consecutive day. Providing additional support to the Gold price. However, lowered bets for an early interest rate cut by the Federal Reserve (Fed) remain supportive of elevated US Treasury bond yields. Which may continue to support the USD and limit advances in the non-yielding yellow metal. As a result, aggressive bullish traders should exercise care before preparing for any major appreciation in the XAUUSD.
Daily Market Movers: Gold price fails to entice buyers despite mixed fundamental signs.
The US-led forces continue to combat with the Iran-backed Houthi group in the Red Sea. Which appears to support the safe-haven gold price amid moderate range-bound price action around the US dollar.
On Thursday, Houthi militants in Yemen launched two anti-ship ballistic missiles at a US-owned. Greek-operated tanker ship, prompting the US to carry out its fifth strike against Houthi targets.
Pakistan launched a series of military operations against terrorist hideouts in Iran’s Sistan-Baluchistan province. While the latter began a planned air defense rehearsal from its port of Chabahar, near Pakistan.
The USD consolidates below its best level since December 13, achieved earlier this week. Although lowered bets for a March rate cut by the Federal Reserve continue to act as A tailwind.
The incoming solid US macro data released this week revealed that the economy is in good shape. Allowing the central bank to keep interest rates higher for longer.
Against the backdrop of positive US retail sales data on Wednesday, statistics reported on Thursday revealed. That initial jobless claims fell to their lowest level since September 2022.
The markets reacted quickly to the robust labor-market report, pricing in just over a 50% chance of a rate drop at the March FOMC meeting, down from 75% a week earlier.
The yield on the benchmark 10-year US government bond reached its highest level since mid-December, favoring USD bulls and should contain gains for the non-yielding yellow. metal.
Traders are currently looking for short-term chances in US macro data, including Preliminary Michigan Consumer Sentiment and Inflation Expectations, as well as Existing Home Sales.
