The gold price (XAU/USD) experienced a slight decline to $2,020 during the early Asian session on Monday. A modest recovery in the US Dollar (USD), supported by robust US Services PMI data, exerted downward pressure on the yellow metal. The Federal Reserve’s (Fed) recent decision to keep interest rates unchanged, coupled with Chairman Jerome Powell’s dovish stance, highlighted the goal of lowering inflation by the end of 2023 and signaled no planned rate hikes in 2024.
While Chicago Fed President Austan Goolsbee expressed caution, stating it’s too early to declare victory in the central bank’s inflation fight, New York Fed President John Williams attempted to temper market expectations on rate cuts, emphasizing that it was premature to consider such measures. The flash reading of the US S&P Global Manufacturing PMI fell to a four-month low in December, contributing to the USD’s modest rebound from multi-month lows.
Market participants will closely monitor upcoming economic data, including the US Building Permits, Housing Starts, and Gross Domestic Product Annualized for Q3. Additionally, the key focus will be on the Personal Consumption Expenditures Price Index (PCE) set to be released on Friday, as it serves as the Fed’s preferred inflation gauge. These factors will likely influence the direction of the gold price in the coming sessions.
