In the early European session on Wednesday, the price of gold (XAU/USD) maintained its position above the $2,300 threshold despite a slight decline, staying above a two-week low recorded in the previous session. The market sentiment was buoyed by easing concerns surrounding potential escalation of geopolitical tensions in the Middle East, which contributed to a positive tone in equity markets.
Investors witnessed some dip-buying in the US Dollar (USD), driven by expectations of a hawkish stance from the Federal Reserve (Fed). This trend exerted pressure on the non-yielding yellow metal.
However, the downside was cushioned by cautious trading behavior among traders who refrained from making aggressive directional bets, particularly in anticipation of significant US macroeconomic releases. Market focus is primarily directed towards the Durable Goods Orders data scheduled for later in the day, providing insights into the state of the US economy.
Furthermore, attention remains fixed on the impending release of the Advance US Q1 GDP report and the Personal Consumption Expenditures (PCE) Price Index. These data points are pivotal in shaping market expectations regarding the Fed’s stance on potential rate adjustments, thereby influencing demand for the USD and determining the near-term trajectory of gold prices.
