Gold prices lack follow through buying and are impacted by a number of opposing causes.
The gold price (XAUUSD) struggles to capitalise on the previous day’s recovery from a two week low levels just below $2,300. And oscillates in a narrow range during the Asian session on Wednesday.
As geopolitical tensions ease, demand for the safe-haven precious metal continues to fall.
Fears of a further escalation of tensions in the Middle East have faded. And the safe-haven precious metal continues to suffer. Aside from this, increasing acceptance
The Federal Reserve’s (Fed) decision to maintain interest rates higher for longer in the face of persistent inflation limits the upside for the non-yielding yellow metal.
US PMIs weigh on the USD and provide support ahead of critical US macro data.
Meanwhile, the US Dollar (USD) is near its lowest level in almost a week. Following Tuesday’s gloomy release of the US PMIs, which signaled that the economic recovery lost pace at the start of the second quarter. This, in turn, is expected to strengthen the gold price as traders anticipate significant US macro data on Thursday and Friday, namely the Advance Q1 GDP report and the Personal Consumption Expenditures (PCE) Price Index. Meanwhile, the US Durable Goods Orders data may provide some momentum to the XAUUSD later today.
Daily Market Movers: The gold price continues to be weakened by declining safe-haven demand.
Easing fears over geopolitical tensions in the Middle East continue to support. A generally favorable risk tone and act as a drag on the safe haven gold price.
Hawkish statements from Federal Reserve officials boosted chances that the US central bank will maintain interest rates higher for longer, further undermining the non-yielding yellow metal.
The worse US PMI prints reported on Tuesday keep US Dollar bulls on the defensive near a one and a half week low. Which is expected to provide some support for the commodity.
The S&P Global Composite Purchasing Managers Index (PMI) dipped to 50.9 in April’s flash estimate. Indicating that business activity in the US private sector grew at a slower rate. .
Meanwhile, the S&P Global Manufacturing PMI unexpectedly entered contraction zone in April. While the services sector PMI fell to 50.9 from 51.7 in March.
Traders also choose to remain on the sidelines ahead of this week’s significant US macro data. Which may affect the Fed’s future policy decision and provide a new push to the XAUUSD.
The US economic calendar for Wednesday includes Durable Goods Orders. But the spotlight remains on the Advance Q1 GDP report and the Personal Consumption Expenditures (PCE) Price Index.
