Gold resumed their upward trend despite September Fed rate cut predictions.

In the Asian session on Thursday, gold (XAUUSD) remained at a one-week high, lacking bullish conviction and trading below the critical 50-day Simple Moving Average (SMA) barrier. The incoming US macro data indicated that inflationary pressures are lessening and the economy is faltering, increasing anticipation that the Federal Reserve (Fed) may drop interest rates twice this year. This turns out to be a critical factor directing flows toward the Yellow metal that produces no yield.

Geopolitical dangers and political uncertainties in Europe also boost the XAUUSD.

Furthermore, global tensions and increasing political uncertainty in Europe bolster demand for the safe-haven precious metal. Meanwhile, the Fed took a more hawkish posture last week, as policymakers continue to advocate for a single rate cut in 2024.    Furthermore, a positive rise in US Treasury bond yields helps to stimulate US Dollar (USD) demand. This helps to limit any additional increases in the XAUUSD.

Daily Market Movers: Gold price maintains intraday gains as USD stabilizes.

The uncertainty around when the Federal Reserve would begin decreasing interest rates puts traders on the sidelines, resulting in sluggish range-bound market movement around the gold price.
The Fed only projected one Interest rates are expected to be cut this year, down from three in March, acting as a tailwind for US Treasury bond yields and capping the gain for the non-yielding yellow metal.
The US Retail Sales report issued on Tuesday indicated poor economic activity, which, along with lower US consumer and producer prices, should allow the Fed to loosen monetary policy shortly.
The current market price shows a stronger likelihood of the first rate decrease in September, with the possibility of another rate drop in November or December, providing some support for the XAUUSD.
Ukrainian drone assaults on Russian energy infrastructure, as well as Israel’s warning of an all-out conflict with Iran-backed Hezbollah, hint to rising geopolitical risk in Europe and the Middle East.
Concerns that a new French administration may weaken budgetary discipline act as a tailwind for safe-haven assets, limiting any major decline in the commodity.
Investors are now looking forward to the Swiss National Bank (SNB) decision and the critical Bank of England (BoE) policy meeting, which may infuse volatility and provide some push for the metal.
Traders will also take cues from the US data docket, which includes the release of the customary Weekly Initial Jobless Claims, Philadelphia Fed Manufacturing Index, Building Permits, and Housing Starts.