Gold prices fell on Monday as the US Dollar strengthened by 0.20%, ahead of the Federal Open Market Committee (FOMC) monetary policy decision. The FOMC meeting begins on July 30 and concludes the next day with a statement release and a press conference by Federal Reserve Chair Jerome Powell. XAU/USD traded at $2,377 after reaching a daily high of $2,403.
Despite a slightly optimistic market sentiment on Wall Street, the robust US Dollar exerted downward pressure on bullion prices. Reports indicate that gold consumer demand in Asia is suffering due to high retail prices and concerns over China’s economic growth.
Geopolitical risks, however, limited gold’s losses. The recent Hezbollah rocket strike on Israel has heightened tensions in the Middle East, providing some support for the safe-haven asset.
Investors are also focused on the upcoming US economic data releases. Key reports include the JOLTS Job Openings, ADP Employment Change data, and the FOMC’s decision. While the Federal Reserve is expected to maintain current interest rates, market participants anticipate signals regarding the potential start of an easing cycle. The CME FedWatch Tool indicates a 100% probability of a quarter-percentage-point rate cut at the September meeting.
Forex.com market analyst Fawad Razaqzada noted, “If the Fed confirms a dovish stance, predictions could escalate to potentially three cuts before the end of the year.”
Additionally, this week will see the release of the Institute for Supply Management (ISM) Manufacturing PMI and the Nonfarm Payrolls report for July, which are expected to further influence market dynamics.
