The price of gold (XAU/USD) exhibited a positive bias on Thursday, supported by a lack of significant economic data releases mid-week. However, the precious metal faces challenges from a stronger US Dollar (USD) and hawkish sentiments expressed by the US Federal Reserve (Fed), which are expected to limit upward movement in the near term.
Despite these headwinds, global gold demand has shown robust growth, driven by strong investment activity in the over-the-counter market, ongoing central bank purchases, and increasing demand from key Asian markets such as China and India, according to the World Gold Council’s (WGC) latest report. Additionally, the prevailing risk-averse sentiment and uncertainties surrounding geopolitical tensions in the Middle East could further bolster demand for traditional safe-haven assets like gold.
Market participants are eagerly awaiting fresh catalysts to guide gold prices. The release of US weekly Initial Jobless Claims on Thursday and a scheduled speech by San Francisco Fed President Mary Daly, known for her dovish stance within the central bank, are events of particular interest. Dovish remarks from Fed officials may serve to support the downside of gold prices in the current environment.
In summary, gold prices are holding onto a positive trajectory amidst a complex mix of market factors. While challenges persist from a stronger US Dollar and Fed commentary, strong global demand dynamics and geopolitical uncertainties continue to underpin the appeal of gold as a safe-haven asset. The upcoming economic data and speeches from Fed officials are poised to influence market sentiment and provide further direction for gold trading in the days ahead.
