Gold prices (XAU/USD) saw modest gains during early European trading on Wednesday, bolstered by growing speculation that the US Federal Reserve might begin cutting interest rates as soon as September. This anticipation supports the appeal of gold, a non-yielding asset. Additionally, global and European political uncertainties are driving investors towards gold, traditionally seen as a safe-haven asset.
However, China’s central bank’s decision to halt gold purchases for the second consecutive month could dampen bullish sentiment among traders. As the world’s largest gold consumer, China’s purchasing trends significantly influence the market.
Investors are also closely watching Federal Reserve Chair Jerome Powell’s second semi-annual testimony on Wednesday, along with speeches from Fed officials Michelle Bowman and Austan Goolsbee. On Thursday, the US Consumer Price Index (CPI) inflation data will be released, which is expected to provide further insight into the future trajectory of US interest rates.
