Gold prices (XAU/USD) have attracted buyers for the fourth consecutive day, reaching levels not seen since December 28. This surge follows Friday’s disappointing release of the US ISM Manufacturing PMI and the University of Michigan’s Consumer Sentiment Index. Coupled with less-hawkish remarks from Federal Reserve (Fed) officials, these factors have strengthened expectations of a June rate cut. The resulting pressure on the US Dollar (USD) has kept USD bulls on the defensive, creating a favorable environment for the precious metal.
In addition to the weakened USD, a softer tone observed in US equity futures is contributing to the appeal of gold as a safe-haven asset. Despite these positive factors, the upward momentum is tempered as traders display caution in making aggressive directional bets. Market participants are keenly awaiting additional cues regarding the Fed’s stance on future rate cuts.
The spotlight now turns to Fed Chair Jerome Powell’s congressional testimony, expected to provide insights into the central bank’s monetary policy. Investors are eager to glean information that may impact the trajectory of XAU/USD. Furthermore, attention will be squarely focused on the upcoming US Nonfarm Payrolls (NFP) report scheduled for release on Friday, as it is anticipated to offer meaningful impetus to gold prices.
As the precious metal continues to hover near recent highs, market participants remain vigilant, ready to react to any developments that might influence the balance between economic concerns and the potential for a dovish shift in Fed policy. The confluence of these factors is shaping the current landscape for gold prices, with a cautious optimism prevailing among investors as they await key events to unfold in the coming days.