Gold prices (XAU/USD) experienced a decline on Tuesday, pressured by the strengthening US Dollar (USD) and increased US Treasury bond yields. Despite this, the anticipation of a potential interest rate cut by the US Federal Reserve (Fed) in September may provide some support for the precious metal. Lower interest rates typically reduce the opportunity cost of holding non-yielding assets like gold.
Additionally, ongoing geopolitical tensions in the Middle East could drive demand for gold as a safe-haven asset.
Looking ahead, the Institute for Supply Management’s (ISM) Manufacturing Purchasing Managers Index (PMI) will be released on Tuesday. However, the key event for the week will be the August Nonfarm Payrolls (NFP) report, which is expected to play a significant role in shaping expectations for the Fed’s interest rate decisions and could impact gold prices in the near term.
