Gold prices recover recent losses as the US Dollar corrects.
Diplomatic efforts to ease tensions in the Middle-East could challenge the safe-haven Gold.
Greenback faces challenges due to the pullback in the US Treasury yields.
Gold price recovers the recent losses, trading higher near $1,980 during the Asian session on Tuesday. The price of the precious metal receives upward support due to the correction in the US Dollar (USD), which could be attributed to the downbeat US Treasury yields.
While geopolitical tensions between Israel and Hamas typically boost demand for gold as a traditional safe-haven asset, the current risk-on sentiment is challenging gold prices. Diplomatic efforts to ease tensions in the Israel-Hamas Gaza Strip have softened market risk aversion, leading to a rebound in investor risk appetite.
The revelation about China’s intention to authorize slightly over 1 trillion yuan in additional sovereign debt issuance might serve as a bolster for Gold prices. This step aligns with the Chinese Communist Party’s strategy to boost infrastructure spending and stimulate economic growth. The approval for the extra debt issuance is anticipated to come from the standing committee of the National People’s Congress (NPC) on the final day of their meeting.
The US Dollar Index (DXY) seems set to extend its four-day losing streak, possibly influenced by downbeat US Treasury yields. The spot price bids around 105.60 at the time of writing.
The 10-year Treasury yield surged to 5.02%, marking its first time at such levels since 2007. However, it promptly reversed direction, declining to 4.85% by the press time.
Atlanta Federal Reserve President Raphael Bostic expressed skepticism about a US central bank rate cut before the middle of next year. Fed Philadelphia President Patrick Harker echoed a preference for maintaining current interest rates, while Fed Cleveland President Loretta Mester suggested that the US central bank is either at or very close to the peak of the rate hike cycle.
Moreover, as per the CME FedWatch Tool, market expectations do not anticipate a November rate hike, yet the odds for January 2024 linger above 30%.
Market watchers gear up for a week packed with key indicators. Tuesday brings scrutiny of the US S&P Global PMI, followed by a keen eye on Thursday’s Q3 Gross Domestic Product (GDP) figures. The week concludes with a focus on the Core Personal Consumption Expenditures (PCE) on Friday.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : FXStreet – https://www.fxstreet.com/news/gold-price-forecast-xau-usd-rebounds-near-1-980-on-downbeat-us-dollar-202310240201