Gold prices (XAU/USD) continued their downward trend during the early European session on Monday, although they remain close to their highest levels since May 22, reached last week. The commodity appears poised for further appreciation, driven by expectations of dovish actions from the Federal Reserve.
Market sentiment suggests that the Fed may start cutting interest rates as early as September, a move anticipated to support the non-yielding yellow metal. Additionally, there are expectations of further rate cuts in December, which have not translated into significant gains for the US Dollar (USD). This has contributed to a favorable environment for gold prices, even as the USD shows modest recovery from a three-month low.
In addition to monetary policy dynamics, recent political events, including an alleged assassination attempt on former President Donald Trump, alongside ongoing economic challenges in China, bolster the short-term positive outlook for XAU/USD.
