Gold price edges higher on subdued Greenback on Monday.
The US Dollar receives downward pressure on speculations of the Fed initiating rate cuts from June.
Gold price could face challenge as US Treasury yields move lower on improved risk sentiment.
Gold price rises to near $2,170 per troy ounce, reclaiming losses from the previous two sessions. The uptick in Gold prices can be attributed to a weaker US Dollar (USD), which is influenced by the dovish sentiment surrounding the Federal Reserve’s stance on interest rate trajectory. Market sentiment leans toward the Fed initiating interest rate cuts starting in June, and a softer Greenback has bolstered the appeal of bullion.
During a press conference, Federal Reserve Chair Jerome Powell noted that an unexpected rise in unemployment could lead the central bank to consider lowering interest rates. Powell also reassured markets that the Fed would not hastily respond to consecutive months of elevated inflation figures. Furthermore, Gold prices have been buoyed by recent indications from Fed policymakers that they still anticipate reducing interest rates by three-quarters of a percentage point by the end of 2024, despite recent high inflation readings.
Indeed, the decline in US yields indicates a shift in investor sentiment toward US Treasury bonds, potentially posing a challenge for non-yielding assets like Gold. With the 2-year and 10-year yields on US Treasury bonds holding steady at 4.60% and 4.21%, respectively. Investors may find the relative safety and stability of bonds more attractive compared to Gold.
The upcoming US inflation readings are expected to have a significant impact on the prices of the precious metal. Gold traders will closely monitor the release of Gross Domestic Product (GDP) data for the fourth quarter of 2023 and the Personal Consumption Expenditures (PCE) price index report from the United States (US) during the week, as these indicators can provide insights into inflationary pressures and influence Gold prices accordingly.
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-retraces-recent-losses-rises-to-near-2-170-202403250545