Gold price (XAU/USD) struggled to gain momentum in Wednesday’s early European session, hovering within a narrow trading range. Market sentiment suggests that the Federal Reserve (Fed) is likely to maintain higher interest rates for an extended period due to the resilience of the US economy, posing a challenge for the non-yielding bullion. Additionally, optimism surrounding equity markets, fueled by hopes of easing tensions in the Middle East, further dampened the appeal of the safe-haven commodity.
Despite these factors, the downside for gold remains supported as traders refrain from making aggressive bets, opting to await more clarity on the timing and pace of potential interest rate cuts by the Fed. Attention is now focused on next week’s release of US consumer inflation figures, which could influence the central bank’s future policy decisions and impact XAU/USD.
In the interim, traders will closely monitor US Trade Balance data and speeches by Fed officials on Wednesday for short-term trading opportunities within the commodity market.
