Gold prices (XAU/USD) continued their decline during the European session on Friday, trading near a multi-day low around $2,420. The US Dollar (USD) has built on its previous day’s recovery from a four-month low, acting as a key driver behind gold’s third consecutive day of losses. Additionally, profit-taking following a significant rally of over 6.5% since the beginning of the month has contributed to the decline, though the potential for further downside appears limited.
Market expectations now strongly favor a Federal Reserve rate cut in September, with investors also anticipating two additional reductions by the end of the year. This outlook has kept US Treasury bond yields subdued and is likely to constrain further USD strength.
Meanwhile, a risk-off sentiment could provide support for gold, alongside ongoing geopolitical tensions and strong central bank demand, which may help mitigate any substantial declines for the precious metal.
