As the European session approaches, the gold price (XAU/USD) exhibits a slight positive bias, remaining in proximity to the weekly low from the previous session. Traders exercise caution, adopting a wait-and-see stance ahead of the release of the US Personal Consumption Expenditures (PCE) Price Index later in the day. This crucial inflation data is anticipated to offer insights into potential future policy decisions by the Federal Reserve (Fed), influencing the demand for the US Dollar (USD) and impacting the non-yielding gold.
The gold market is currently influenced by several factors, including a dip in US Treasury bond yields, maintaining pressure on the USD below its recent peak on Wednesday. This trend acts as a supportive tailwind for gold. Additionally, geopolitical tensions in the Middle East and a globally uncertain economic outlook contribute to the appeal of gold as a safe-haven asset.
However, despite these supportive factors, the gold market faces resistance due to the diminishing likelihood of a more aggressive Fed policy easing in 2024. This cautious sentiment restrains bullish traders from initiating fresh positions in XAU/USD, limiting potential gains for the precious metal.
