Gold prices (XAU/USD) are losing traction on Monday, despite the softer US Dollar. This comes as markets continue to digest the Federal Open Market Committee’s (FOMC) dovish hold and the weaker-than-expected US employment report. Despite these developments, the yellow metal finds some support from the pressure on US Treasury bond yields and the USD, as well as rising geopolitical tensions in the Middle East, which continue to bolster demand for safe-haven assets.
Investors are now looking ahead to the US ISM Services Purchasing Managers Index (PMI) set to be released later today. The Services PMI is anticipated to increase to 51.0 in July, up from 48.8 in June. Should the data come in stronger than expected, it could strengthen the US Dollar, potentially capping the upside for gold.
In summary, while gold prices are currently under pressure, factors such as dovish Fed signals, softer employment data, and geopolitical uncertainties could continue to provide support for the precious metal. However, the upcoming US Services PMI will be a key indicator to watch for further market direction.
