Gold prices (XAU/USD) traded within a narrow range during Monday’s European session, encountering resistance around the $2,400 mark earlier in the day. News of potential escalation in the Middle East conflict, potentially spilling over into Lebanon, has heightened investor caution and bolstered the appeal of the safe-haven US Dollar.
These geopolitical risks are currently overshadowing the upcoming Federal Reserve (Fed) meeting on Wednesday, which is the focal point of the week. Last Friday’s Personal Consumption Expenditures (PCE) Price Index data for June indicated persistent inflation near the Fed’s 2% target. Despite this, investors are optimistic about the possibility of the Fed initiating an easing cycle in September, with expectations that the Fed might provide hints about this direction during the meeting.
Adding to this anticipation, Tuesday’s release of the US JOLTs Job Openings data for June and the Conference Board’s Consumer Sentiment Index for July are expected to show moderate softening. These indicators may further support the case for a rate cut in September.
