On Thursday, the Gold price (XAU/USD) witnessed a resurgence, recouping a substantial portion of the previous day’s losses from the vicinity of the weekly peak. The US Dollar (USD) faced challenges in capitalizing on its overnight positive momentum, as market sentiments increasingly speculate on the Federal Reserve (Fed) initiating interest rate cuts as early as March 2024. This sentiment is reinforced by the recent dip in US Treasury bond yields to multi-month lows, contributing to a subdued USD and providing some backing to the precious metal.
Adding to the appeal of gold, a general softness in the equity markets is seen as an additional factor favoring the safe-haven asset. Despite this, the commodity remains range-bound for over a week, with traders exercising caution ahead of the release of the US Core Personal Consumption Expenditure (PCE) Price Index – a crucial inflation metric for the Fed. The forthcoming data is anticipated to wield considerable influence over the central bank’s future policy decisions and determine the short-term trajectory for XAU/USD.
In the interim, market participants on Thursday will closely monitor the final US Q3 GDP print, alongside the customary Weekly Jobless Claims and the Philly Fed Manufacturing Index, all of which are expected to steer USD demand. Furthermore, the movement of US bond yields and the broader risk sentiment are poised to contribute to short-term trading opportunities surrounding the Gold price. Despite potential fluctuations, the fundamental landscape appears to favor bullish prospects, supporting the notion of a continued upward trajectory for the precious metal.
