Gold traders are closely monitoring upcoming US economic data as they await clues on potential shifts in Federal Reserve (Fed) monetary policy. The price of gold (XAU) remained relatively steady on Wednesday, fluctuating between $2,305 and $2,320, with market attention squarely focused on developments from the US.
Today at 12:30 p.m. UTC, the US Jobless Claims data will be released, followed by the preliminary University of Michigan Consumer Sentiment Index report on Friday. Analysts predict a decline in the sentiment index from 77.2 in April to 76.0 in May, which could provide support for gold prices.
Ajay Kedia, director at Kedia Commodities in Mumbai, commented on the cautious stance of gold traders amidst expectations of a Fed interest rate cut in September. Kedia warned that if the US inflation report shows higher-than-anticipated figures, gold prices could retreat to $2,290.
Simultaneously, geopolitical tensions in the Middle East are adding complexity to the market dynamics. Israeli forces recently conducted strikes in Gaza’s southern region, while Hamas indicated reluctance to make further concessions in ceasefire negotiations with Israel. The United States, meanwhile, is advocating for peace and encouraging dialogue between the parties involved.
US President Joe Biden, speaking in an interview with CNN on Wednesday, emphasized his stance regarding potential military actions in Gaza, stating, “I made it clear that if they go into Rafah, I’m not supplying the weapons.”
In the midst of these developments, the World Gold Council highlighted ongoing factors supporting gold prices, including robust central bank demand and investor interest, particularly in East Asia. The Council also cited persistent geopolitical tensions as contributing to a “geopolitical premium” that bolsters gold’s appeal in the current investment climate.
Notably, the People’s Bank of China continued its gold accumulation streak by adding 60,000 troy ounces to its reserves in April, marking 18 consecutive months of purchases. The XAU/USD pair maintained its range-bound movement between $2,305 and $2,320 during Asian and early European trading sessions on Thursday, with focus now shifting to the imminent US Jobless Claims report.
Traders anticipate that higher-than-expected jobless claims figures could lend support to XAU/USD, while lower numbers may exert downward pressure on the pair. The gold market remains attuned to economic indicators and geopolitical developments as it navigates current uncertainties.
