During the early European session on Wednesday, gold prices (XAU/USD) demonstrated resilience as investors engaged in dip-buying near the $2,024-2,023 level. The precious metal has maintained a positive bias for the second consecutive day in the face of geopolitical risks linked to the Israel-Hamas conflict and apprehensions regarding a sluggish economic recovery in China.
Investor sentiment is influenced by concerns over a potential delay in an early interest rate cut by the Federal Reserve (Fed). This cautious stance is reflected in a weaker tone observed in equity markets, providing some support to gold, considered a safe-haven asset in times of uncertainty.
Despite these geopolitical and economic worries, the probability of a more aggressive Fed policy easing in 2024 appears to be diminishing. The U.S. economy’s resilience contributes to holding back bullish bets on gold. Additionally, the U.S. Dollar (USD) is hovering just below a multi-week high achieved last Friday, supported by elevated US Treasury bond yields. Traders are closely monitoring upcoming U.S. consumer inflation figures for insights into the Fed’s potential rate-cut trajectory.
