Gold (XAU/USD) reversed an earlier dip during the Asian session to rise towards $2,400, reaching the upper end of its daily trading range in the last hour. The commodity remains close to its highest level since May 22, achieved last week, and appears set to appreciate further amid dovish expectations from the Federal Reserve (Fed).
Market participants are increasingly convinced that the Fed will begin cutting interest rates in September, providing a tailwind for the non-yielding yellow metal. Furthermore, the possibility of the Fed lowering borrowing costs again in December has been priced into the markets. This expectation hampers the US Dollar (USD) from capitalizing on its modest recovery from a three-month low, further supporting the USD-denominated gold price.
Additional factors supporting the positive outlook for gold include political tensions in the United States following an alleged assassination attempt on former President Donald Trump and economic concerns in China. These elements bolster the near-term bullish sentiment for XAU/USD.
