Gold Price (XAU/USD) steadies around $1,965 as bulls and bears jostle during the early hours of the key data comprising the Federal Open Market Committee (FOMC) monetary policy meeting announcements. Also challenging the XAU/USD price could be the latest headlines testing the previous optimism about China. Furthermore, mixed data from the United States and the pre-Fed anxiety, as well as a light calendar in Asia, appear as extra carriers for the Gold price of late. Even so, the yellow metal defends the previous day’s corrective bounce off the lowest levels in a week by the press time.
Gold Price edges higher on cautious optimism ahead of Fed
Gold Price remains on a firmer footing despite the latest inaction as markets keep expecting a sooner end to the rate hike trajectory at the major central banks. Also favoring the sentiment, as well as the XAU/USD, could be the upbeat statements from China Communist Party’s Politburo meeting and China state planner National Development and Reform Commission (NDRC) suggesting more stimulus from Beijing.
Furthermore, the International Monetary Fund’s (IMF) upward revision to the global growth forecasts also favored the risk-on mood and the Gold Price.
On the other hand, the US Dollar’s failure to cheer mostly upbeat data on Tuesday, due to the downbeat PMIs and previously disappointing inflation and employment signals, also provides tailwinds to the Gold Price.
On Tuesday, US Conference Board (CB) Consumer Confidence jumped to 117.0 for July from 110.10 prior (revised) versus market forecasts of 112.10. The survey details unveiled that the one-year consumer inflation expectations edged lower to 5.7% while the Present Situation Index and Consumer Expectations Index rose to 160.0 and 88.3 in that orders for the said month. That said, the US Housing Price Index for May reprinted the 0.7% MoM growth compared to analysts’ estimation of 0.2% whereas the S&P/Case-Shiller Home Price Indices also repeated the -1.7% YoY figures for the said month versus -2.2% expected.
Following the data, the US Dollar Index (DXY) regained upside momentum and rose to a fresh high in a fortnight, before positing the first daily loss in six. It should be noted that the upbeat prints of US S&P Global Manufacturing PMI for July favored the US Dollar to refresh a two-week high on Monday even as the Chine-inspired optimism weighed on the greenback during early Tuesday. Apart from the US data, Reuters’ news stating China state banks’ defense of the Yuan (CNY), by selling the US Dollar, also seemed to have weighed on the US Dollar and propelled the Gold Price.
It’s worth noting that the latest headlines suggest fresh US-China tension, due to the US Senate’s passage of an amendment requiring US companies to report investment in China technologies like semiconductors and artificial intelligence (AI).
