- Gold price experiences selling pressure for the second consecutive day as safe-haven demand diminishes.
- A strengthening US Dollar further weighs on the commodity, fueled by indications of de-escalating trade tensions.
- Expectations of Federal Reserve rate cuts limit the US Dollar’s upside potential, thereby cushioning the downside for the non-yielding precious metal.
Gold (XAU/USD) is finding it difficult to attract buyers, hovering near its daily low just above the $2,300 level during the first half of Wednesday’s European trading session. This lackluster performance is attributed to signs of easing trade frictions between the United States and China, which are diminishing the appeal of safe-haven assets. Furthermore, month-end currency flows are providing a moderate boost to the US Dollar (USD), adding another layer of downward pressure on the price of gold.
President Trump’s evolving position on trade and the inconsistent signals emanating from US-China trade negotiations are contributing to ongoing global uncertainty. This ambiguity, coupled with market expectations for a more accommodative monetary policy stance from the Federal Reserve (Fed), is preventing any significant appreciation in the US Dollar and providing some support for gold prices. Market participants are now keenly awaiting key macroeconomic data releases from the United States, including reports on GDP growth, inflation, and employment, which are expected to provide short-term trading opportunities and potentially influence the Fed’s future policy decisions. Recent economic indicators have painted a mixed picture, with some suggesting a slowdown in growth while others point to continued resilience in the labor market. This divergence is adding to the uncertainty surrounding the Fed’s next move and contributing to volatility in the gold market.
