Gold began the new week on a lower note, despite some USD buying.
The gold price (XAUUSD) recovers from an Asian session low near $2,400 and climbs to the upper end of its daily trading range in the last hour.
Bets that the Fed will lower rates in September curb USD gains and strengthen the metal.
Meanwhile, the commodity is well within striking distance of its highest level since May 22, which it reached last week, and appears prepared to rise further amid dovish Federal Reserve (Fed) predictions. Indeed, market participants appear confident that the Federal Reserve (Fed) will begin decreasing interest rates in September, which is expected to act as a tailwind for the non-yielding yellow metal.
The US political uncertainty following Trump’s assassination attempt helps to limit losses.
Markets have priced in the probability of the Fed cutting borrowing prices again in December. This fails to help the US Dollar (USD) capitalize on its modest comeback gains from a three-month low, and it turns out to be another element acting as a tailwind for the USD-denominated gold price. Aside from that, US political concerns following an alleged assassination attempt on former US President Donald Trump, as well as China’s economic troubles, support the XAUUSD’s near-term optimistic outlook.
Daily Market Movers: The gold price gains support from Fed rate cut bets and poor Chinese macro data.
The US Dollar find some buyers on Monday. Reversing some of its recent losses to almost a three-month low. Which expected to place some pressure on the Gold price for the second consecutive day.
The US Bureau of Labor Statistics said on Friday that the Producer Price Index (PPI) for final demand increased by 2.6% year on year in June, exceeding consensus expectations of 2.3%.
Furthermore, political instability in the aftermath of a failed assassination attempt on US Presidential candidate Donald Trump boosts the Greenback, albeit dovish Federal Reserve predictions may limit gains.
The current market pricing indicate more than 90% possibility. That the The Fed will begin its rate-cutting cycle in September. And the views were boosted by another benign US consumer inflation report issued last Thursday.
Furthermore, the US political environment should limit investors’ appetite for riskier assets. And provide some support to the safe haven Gold prompting prudence before positioning for further losses.
National Bureau of Statistics (NBS) revealed earlier this Monday that China’s GDP rose by 4.7% year on year in the second quarter of 2024.
The National Bureau of Statistics (NBS) revealed earlier this Monday that China’s GDP rose by 4.7% year on year in the second quarter of 2024, compared to 5.3% growth in the first quarter.
Furthermore, China’s retail sales increased by 2.0% YoY in June, compared to 3.1% projected and 3.7% previously, while Fixed Asset Investment increased by 3.9% YTD YoY in June, compared to 3.9% predicted and 4.0% last year.
The data pointed to increased economic uncertainty, overshadowing the somewhat better-than-expected announcement of Industrial Production numbers, which came in at 5.3% YoY vs. 5.0% forecasts.
Gold Traders are now looking forward to the release of the Empire State Manufacturing Index from the United States for short-term possibilities before Fed Chair Jerome Powell speaks later in the North American session.
