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GOLD PRICE FORECAST: XAU/USD RECOVERS ABOVE $1,990 AS USD INDEX CORRECTS GRADUALLY, FED’S BEIGE BOOK EYED

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Gold price (XAU/USD) has shown a recovery move after printing an eight-day low of $1,981.02 on late Monday. The precious metal has rebounded to near $1,996.00 after a mild correction in the US Dollar Index (DXY). It would not be justified considering the recovery move as a reversal as bets for one more rate hike from the Federal Reserve (Fed) are extremely solid.

S&P500 futures are choppy in early trade after a bullish Monday. US equities are ignoring China-Taiwan tensions, portraying a risk-on mood. Reports showed that Taiwan will purchase up to 400 land-launched harpoon missiles to repel a potential Chinese invasion, completing a deal approved by Congress in 2020.

The US Dollar Index (DXY) is juggling above 102.00 after a mild correction. The upside bias has not faded yet as Federal Reserve (Fed) policymakers are not convinced of easing inflationary pressures. and CEO of the Federal Reserve Bank of Richmond Thomas Barkin said in the late New York session that he wants to see more evidence of inflation settling back to target.

This week, the release of Fed’s Beige Book will be keenly observed. The report will provide cues about the current economic situation of 12 Fed districts. Also, it will provide a true picture of retail demand and employment levels on a regional basis.


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