Gold prices (XAU/USD) faced selling pressure on Tuesday, falling to the $2,316-2,315 range, nearing a multi-week low reached the previous day. This decline is attributed to a modest recovery in the US Dollar (USD), which had recently been languishing near a two-month low. Despite this slight USD recovery, it lacked momentum due to increasing market belief that the Federal Reserve (Fed) will begin cutting interest rates later this year, a sentiment reinforced by recent softer US macroeconomic data. These expectations have kept US Treasury bond yields low, benefiting the non-yielding gold during the European session on Wednesday.
Additionally, ongoing geopolitical tensions in the Middle East are bolstering gold’s appeal as a safe-haven asset, helping the price approach the 50-day Simple Moving Average (SMA). However, despite these supportive factors, XAU/USD remains trapped within a one-week trading range. Investors appear cautious, avoiding significant directional bets ahead of the critical US Nonfarm Payrolls (NFP) report due on Friday.
In the meantime, upcoming US economic data, including the ADP report on private-sector employment and the ISM Services PMI, is expected to influence market movements later today.
