Gold achieve positive traction on a confluence factors.
The gold price (XAUUSD) attracts modest purchasing during the Asian session on Thursday, but lacks bullish confidence and remains below the $2,400 level. Nonetheless, the precious metal appears to have broken a four-day losing trend and is backed by a number of variables. Investors are anxious about China’s economic slowdown and a potential US recession. This, together with geopolitical risks arising from ongoing conflicts in the The Middle East proves to be an important component, functioning as a tailwind for the safe-haven precious metal.
Fears of a US recession and geopolitical threats weigh on market morale, benefiting the XAUUSD.
Meanwhile, Friday’s dismal US employment report for July boosted anticipation of further interest rate reduction by the Federal Reserve. This, in turn, causes a fresh leg down in US Treasury bond yields, which expected to put downward pressure on the US Dollar (USD) while also benefiting the non yielding Gold price. However, the lack of robust follow buying suggests. That prudence should be exercised before positioning for additional gains. Meanwhile, a persistent break below the 50-day Simple Moving Average (SMA) is required to indicate a short-term bearish collapse.
Daily Market Movers: Gold price attracts haven flows and draws support from falling US bond yields.
This week’s recovery throughout During Thursday’s Asian session. The global equities markets ran out of steam due to persistent concerns about a US recession, providing some support to the safe-haven gold price.
Furthermore, there are concerns that the Iranian attack in retribution for the killing of Hamas leader Ismail Haniyeh in Tehran. As well as the Israeli response, could spark a wider Middle Eastern confrontation.
Dovish Fed predictions and falling US bond yields undercut the USD while lending support.
Investors have fully priced in a 25 basis point rate cut by the Federal Reserve in September. And they are speculating on a 50 basis point rate cut amid concerns about a US economic slump.
Meanwhile, the expectations prompt a second leg down in the US Treasury bond yields and limits the recent US Dollar rebound from A multi-month low. Which supports the non-yielding yellow metal.
Traders are now looking to the typical Weekly Initial Jobless Claims data from the US for some momentum later today, however the focus remains on the US consumer inflation readings. Which are coming out next Wednesday.