Gold prices have rebounded, driven by escalating global trade tensions and increasing concerns regarding a potential economic recession. Expectations of multiple interest rate reductions by the Federal Reserve are exerting downward pressure on the U.S. dollar, providing further support for the precious metal.
The resurgence in gold prices follows a previous unsuccessful attempt to breach the $3,022-3,023 resistance level. Persistent anxieties surrounding trade disputes and recessionary risks are prompting increased investment in gold as a safe-haven asset. Additionally, anticipated monetary easing by the Federal Reserve and continued U.S. dollar weakness are contributing to the metal’s upward trajectory.
However, rising U.S. Treasury yields, potentially fueled by speculation of Chinese Treasury sales, may temper further gains in gold prices. Market participants are awaiting the release of the Federal Open Market Committee (FOMC) meeting minutes for further insights. U.S. inflation data will also be closely monitored this week for indications regarding the Federal Reserve’s future monetary policy decisions, which will subsequently influence the XAU/USD exchange rate. Caution is warranted before confirming the end of the recent pullback from record highs.
