Gold prices (XAU/USD) faced significant selling pressure for the second consecutive day, plunging to a two-week low during Thursday’s early European session. Despite this decline, the precious metal found some support near the $2,365 mark, attracting buyers and reducing some of the intraday losses.
The expectation that the Federal Reserve will commence a rate-cutting cycle in September has kept the US Dollar (USD) subdued, hovering below the two-week high it reached on Wednesday. This scenario has provided a favorable backdrop for gold, a non-yielding asset.
Additionally, a risk-off sentiment, reflected by a weaker tone in global equity markets, has further bolstered gold prices. Investors often turn to traditional safe-haven assets like gold during periods of market uncertainty.
However, traders remain cautious and are likely to avoid making aggressive directional bets until more clarity emerges regarding the Fed‘s policy direction. Key US macroeconomic data, including the Advance Q2 GDP figures due later on Thursday and the crucial Personal Consumption Expenditures (PCE) Price Index set for release on Friday, will be closely watched for further insights.
