Gold trading with a positive bias for the fourth day in a row, close to a multi-month high.
On Monday, the gold price (XAUUSD) broke past the $2,008-2,010 horizontal barrier. And moved to the $2,018 zone, its highest level since mid-May. The precious metal held stable at the mentioned region during the Asian session on Tuesday. Looking set to extend a nearly three-week old rally amid expectations for a pause in the Federal Reserve’s monetary tightening cycle.
Furthermore, wagers for Fed rate drop in 2024 has been proposed in response to signals of diminishing inflationary pressures. Which continues to undercut the US Dollar (USD) and justifies the non-yielding yellow metal’s favorable outlook. Concerns about a worldwide economic slump. On the other hand, appear to be another reason supporting the safe-haven Gold price. However, a bullish tone in Asian equity markets acts as a barrier for the precious metal. Bullish traders appear hesitant to initiate aggressive wagers. Preferring to wait for the release of the US Personal Consumption Expenditure (PCE) Price Index for some real stimulus. Meanwhile, the Consumer Confidence Index from the Conference Board. And statements by Important FOMC members may create short-term trading opportunities later this Tuesday.
Daily Market Movers: The gold price is still underpinned by dovish Fed predictions.
Bets that the Fed will stop rising rates and begin relaxing policy in 2024 remain positive.
The growing belief that the Federal Reserve has stopped rising interest rates helps the non-yielding gold price to remain above the psychological level of $2,000 per ounce.
Softer US consumer inflation data reported two weeks ago increased betting that the Fed will maintain current rates and begin relaxing policy in 2024.
According to data released on Monday, sales of new single-family houses in the United States declined more than expected in October, as rising mortgage rates hampered affordability.
The benchmark 10-year US Treasury bond yield is nearing a two-month low, dragging the US Dollar down to a near three-month low, benefiting the XAUUSD.
Looming Recession worries bolster the safe-haven precious metal. Yet a bullish tone in the equities markets limits any further rises.
As traders await the US PCE Price Index on Thursday, a positive risk tone limits the upside.
Traders are now looking for some stimulus later in the North American session. From the Conference Board’s US Consumer Confidence Index and comments by Fed officials.
Meanwhile, the market’s attention will be drawn to the release of the Fed’s preferred inflation gauge, the core PCE Price Index, on Thursday.
