Gold prices (XAU/USD) have reached a one-week high early Thursday in European trading, aiming to surpass the critical resistance at the 50-day Simple Moving Average (SMA). This rise is driven by recent US macroeconomic data indicating easing inflationary pressures and a slowing economy, prompting speculation that the Federal Reserve (Fed) might cut interest rates twice this year. Such expectations are boosting demand for the non-yielding precious metal.
Additionally, ongoing geopolitical tensions and renewed political uncertainty in Europe are providing further support to gold as a safe-haven asset. Despite these factors, the Fed’s recent hawkish stance and policymakers’ discussions of one rate cut in 2024 are creating a mixed outlook. Furthermore, a notable rebound in US Treasury bond yields is bolstering demand for the US Dollar (USD), potentially capping further gains for XAU/USD.
In summary, while gold prices are benefiting from current economic conditions and geopolitical uncertainties, the interplay of Fed policy expectations and US Dollar strength could influence future price movements.
