During the Asian session on Tuesday, the price of gold (XAU/USD) attracted some buyers, leading to an upward movement from a three-week trough around the $1,976-1,975 region, which was touched in the previous day’s trading. The slight uptick, however, lacks strong conviction as traders eagerly await the release of the latest US consumer inflation figures for more clarity on the potential timing of rate cuts by the Federal Reserve (Fed). The outcome of these events is expected to impact the US Dollar (USD) and subsequently influence the direction of the non-yielding gold price.
Market participants are particularly focused on the highly-anticipated two-day Federal Open Market Committee (FOMC) monetary policy meeting scheduled for Wednesday. The “dot plot,” which illustrates policymakers’ individual rate hike projections, is anticipated to provide fresh insights into the Fed’s near-term policy outlook. This information is crucial for determining the next direction in the price of gold.
Meanwhile, the ongoing tensions between the United States and Iran-backed Houthi rebels in Yemen, coupled with a modest downtick in the USD, are contributing factors that offer some support to gold as a safe-haven asset. As the market awaits key economic indicators and the Fed’s decision, these geopolitical factors add to the overall uncertainty, leading some investors to seek refuge in precious metals.
