On Tuesday, gold prices (XAU/USD) held their ground in positive territory, even as the US dollar showed signs of weakness. Last week’s stronger-than-expected US Purchasing Managers Index (PMI) has led Federal Reserve (Fed) officials to delay the anticipated interest rate cuts, thereby limiting gold’s upward momentum.
Despite this, geopolitical tensions in the Middle East and Ukraine continue to drive safe-haven flows, which could bolster the precious metal in the near term.
Investors are closely monitoring speeches by Fed members Lisa Cook and Michelle Bowman scheduled for Tuesday. Additionally, crucial US economic data will be released later this week, which includes the final reading of the US Gross Domestic Product (GDP) for the first quarter (Q1) on Thursday and the Personal Consumption Expenditure (PCE) Price Index for May on Friday. Signs of easing inflation in these reports could fuel expectations for Fed rate cuts later in 2024. Such a scenario might weaken the US dollar further, providing a favorable backdrop for USD-denominated gold.
