During the early European session on Thursday, gold prices (XAU/USD) exhibited a slight positive trend, albeit lacking significant momentum and remaining close to the weekly low observed in the previous session. Traders are adopting a wait-and-see approach, anticipating cues from the Advance US Q4 GDP growth figures. These figures are crucial in determining the Federal Reserve’s (Fed) stance on interest rate cuts, thereby influencing the direction of the non-yielding gold market in the short term.
The US Dollar (USD) continues to grapple with challenges in garnering substantial buying interest, remaining below its highest level since December 13 reached on Tuesday. This circumstance provides some support to the precious metal. Additionally, the looming risk of heightened geopolitical tensions in the Middle East contributes further to gold’s safe-haven appeal.
Despite these factors, the diminished expectations for a more aggressive policy easing by the Fed and an early interest rate cut are sustaining elevated US Treasury bond yields. This, in turn, acts as a counterforce against significant upward movement in the price of gold. Consequently, market participants are exercising caution and await clear signs of robust buying activity before committing to substantial upside positions, particularly ahead of the release of the US Personal Consumption Expenditures (PCE) Price Index scheduled for Friday.
