The gold price (XAU/USD) has extended its decline for the second consecutive day, reaching a fresh weekly low around the $2,020-2,019 range as the European session begins. Federal Reserve (Fed) Governor Christopher Waller’s comments on Tuesday have prompted investors to further dial back expectations for an early interest rate cut by the central bank. This has bolstered US Treasury bond yields, propelling the US Dollar (USD) to a one-month high and diverting capital away from the non-yielding gold.
The reduced likelihood of a Fed rate cut in March, combined with geopolitical tensions and lukewarm economic growth figures from China, has tempered investors’ appetite for riskier assets. Despite a softer tone prevailing in equity markets, the demand for the safe-haven gold remains muted. This scenario indicates that the XAU/USD is currently facing a downward trajectory, with the path of least resistance favoring further declines.
Market participants are now turning their attention to upcoming US macroeconomic data and speeches by influential Federal Open Market Committee (FOMC) members for potential short-term trading opportunities. As the landscape continues to evolve, these factors are likely to play a crucial role in determining the near-term direction of the gold price.
