Gold price fell somewhat during Tuesday’s Asian session.
Despite the weakened US dollar, the gold price (XAUUSD) fell on Tuesday. The stronger-than-expected US Purchasing Managers Index (PMI) announced last week prompted Federal Reserve (Fed) officials to push back the timing of the first interest rate decrease this year, limiting gold’s potential. However, safe-haven movements as a result of geopolitical tensions in the Middle East and Ukraine may raise gold prices in the near term.
The improved US economic data and the Fed’s hawkish approach continue to support the yellow metal.
Investors will follow more hints. Lisa Cook and Michelle Bowman are among the Fed members set to speak on Tuesday. This week’s key US economic statistics will be the final reading of the US Gross Domestic Product (GDP) for the first quarter (Q1) on Thursday, as well as the Personal Consumption Expenditure (PCE) Price Index for May, which is due on Friday. Any evidence of an easing inflation trend could lead to the assumption of Fed rate decreases in 2024. As a result, the greenback may fall and create a tailwind for USD-denominated gold.
Daily Market Movers: Gold price remains vulnerable to Fed rate cuts.
San Francisco Federal Reserve Bank President Mary Daly stated on Monday that she does not believe the Fed should Cut rates before the central bank is convinced that inflation will reach 2%. Daly went on to say that if inflation remains high, the labor market, despite its strength, may confront increased unemployment.
The final reading of the US headline and Core Personal Consumption Expenditures (PCE) Price Index is predicted to rise 2.6% year on year in May.
Investors will pay close attention to Fed officials Cook and Bowman’s comments on Tuesday.
According to the CME FedWatch Tool, traders now expect. The Fed to decrease interest rates in September by 66%, up from 59.5% at the end of last week.
According to CNN, Israeli Prime Minister Benjamin Netanyahu claimed. That the most intense phase of the attack on Hamas in Gaza is nearing an end. But that the larger struggle against Hamas continues.
Russia denounced the United States for A “barbaric” strike in Crimea, using US-supplied missiles, killed at least four people, including children, and injured 151 others. On Monday, Russia’s Foreign Ministry summoned US Ambassador Lynne Tracy and accused the US of launching a “proxy war,” saying. That reprisal would “definitely follow,” according to local news agency Aljazeera.
