Gold prices (XAU/USD) have extended their gains for the second straight session, trading around $2,400 per troy ounce during the European session on Monday. This increase follows the release of the US Personal Consumption Expenditures (PCE) Price Index data on Friday, which indicated a modest rise in inflation for June. The data has fueled expectations of the Federal Reserve beginning a rate-cutting cycle soon, leading to a decline in US Treasury bond yields. Consequently, the US Dollar has weakened, benefiting the non-yielding yellow metal.
Geopolitical risks, particularly from conflicts in the Middle East, are also contributing to gold’s appeal as a safe-haven asset. However, the metal’s upward momentum is tempered by a positive sentiment in global equity markets, which typically reduces the demand for traditional safe-haven assets like gold.
Market participants are now eagerly awaiting the outcome of the two-day Federal Open Market Committee (FOMC) meeting on Wednesday. Additionally, key US macroeconomic data, including the Nonfarm Payrolls (NFP) report due at the start of the new month, is expected to provide further direction for gold prices.
