Gold prices (XAU/USD) continued their upward trend on Tuesday, marking the second consecutive day of gains and the fifth positive movement in the last six sessions, rising above $2,430 during early European trading. However, the precious metal remains below the peak reached on Monday, attributed to a resurgence in US Dollar (USD) buying. The prevailing risk-on sentiment in the market is also contributing to limiting gold’s upside potential.
Despite these headwinds, the short-term outlook appears bullish as traders increasingly anticipate that the Federal Reserve (Fed) will initiate interest rate cuts in September.
This sentiment was bolstered by recent remarks from Fed Chair Jerome Powell, which have kept US Treasury bond yields low and supported a favorable outlook for the non-yielding asset. Market participants are now awaiting the upcoming US monthly Retail Sales data for additional direction.
