Gold fell somewhat during Monday’s Asian session.
On Monday, the gold price (XAUUSD) traded slightly lower at the psychological support of $2,500. However, the downside of the precious metal may be restricted given increased anticipation. That the US Federal Reserve (Fed) would begin decreasing borrowing rates in September. Lower interest rates are generally beneficial to Gold since they reduce the opportunity cost of owning the non-interest-paying asset.
The US July Durable Goods Orders are due later on Monday.
Geopolitical tensions in the Middle East and economic instability are expected to strengthen the safe-haven Demand boosts the gold price. On the other hand, sluggish demand in China’s economy. Which is the world’s largest producer and consumer of gold, may damage the yellow metal. Later on Monday, the US July Durable Goods Orders are due.
This week’s highlights will be the preliminary US Gross Domestic Product Annualized (GDP) for the second quarter and the Personal Consumption Expenditure-Price Index (PCE) for July. Which will be issued on Thursday and Friday, respectively.
Daily Market Movers: Gold price loses pace despite increased Fed rate drop expectations.
Fed Chair Powell stated on Friday at the Kansas City Fed’s annual economic conference in Jackson Hole: “The time has come for policy to adjust.”
The July FOMC Minutes were released last week. The “vast majority” of Fed policymakers believe a September cut is reasonable as long as there are no data surprises.
Philadelphia Fed President Patrick Harker stated. That he supports two or three interest rate decreases in 2024, assuming no significant changes in US economic statistics.
According to Chicago Fed President Austan Goolsbee, monetary policy is currently at its most restrictive level. And the Fed’s attention has shifted to meeting its employment mission.
Hezbollah launched hundreds of missiles and drones at Israel early on Sunday. Prompting Israel’s military to launch a wave of preemptive strikes over southern Lebanon to foil a large-scale rocket and drone attack by Hezbollah, according to Reuters.
