Gold prices (XAU/USD) are gaining momentum during the early European session on Tuesday, supported by a weaker US Dollar (USD). The upside potential for the precious metal remains significant as traders anticipate that the US Federal Reserve (Fed) might cut interest rates in September, following last week’s softer US employment data. Additionally, political uncertainties in France and geopolitical tensions in the Middle East are bolstering gold prices, given its status as a traditional safe-haven asset.
However, the gains in gold could be tempered by the People’s Bank of China’s (PBoC) decision not to purchase gold for a second consecutive month in June. Traders will be closely watching Fed Chair Jerome Powell’s semi-annual Congressional testimony, as well as speeches from Fed officials Michael Barr and Michelle Bowman. The US Consumer Price Index (CPI) inflation data, set to be released on Thursday, will also be a key focus for the market.
Overall, gold prices are influenced by a mix of economic indicators and geopolitical factors, making it crucial for traders to stay informed on multiple fronts to gauge the future direction of the market.
