The price of gold (XAU/USD) experienced some dip-buying during the Asian session on Tuesday, although it remained within Monday’s broader trading range and below the $2,400 mark. The softer tone in equity markets, coupled with geopolitical tensions from Middle Eastern conflicts, emerged as key factors supporting the safe-haven commodity. Additionally, increasing acceptance that the Federal Reserve (Fed) will initiate a rate-cutting cycle in September has kept US Dollar (USD) bulls on the defensive, benefiting the non-yielding yellow metal.
However, the upside potential for gold prices is likely to be limited as traders may prefer to await further signals regarding the Fed’s policy direction before making decisive moves in the near term. Therefore, attention will be focused on the outcome of the Federal Open Market Committee’s (FOMC) two-day meeting concluding on Wednesday.
Alongside this, significant US macroeconomic data, including Friday’s Nonfarm Payrolls (NFP) report, will play a crucial role in influencing USD price dynamics and the XAU/USD pair. Consequently, it is wise to wait for sustained buying interest to confirm that the recent retreat from the all-time high has concluded.
