- Gold price regains positive traction amid expectations that US interest rates have peaked.
- The recent decline in the US bond yields undermines the US Dollar and remains supportive.
- Looming recession risks and geopolitical tensions further benefit the safe-haven XAU/USD.
Gold price (XAU/USD) attracts some dip-buying near the $1,973 area on the first day of a new week and stalls Friday's modest pullback from a two-week high. The precious metal currently trades just below the $1,985 level, up nearly 0.20% for the day. It seems poised to build on its recent goodish rebound from the monthly low touched last Monday in the wake of dovish Federal Reserve (Fed) expectations.
Growing acceptance that the Fed will maintain the status quo at its December 2023 meeting and ultimately start cutting interest rates in 2024 could keep the US Dollar (USD) depressed near its lowest level since September 1. Apart from this, the worsening global economic outlook, along with geopolitical risks, turns out to be another factor underpinning the safe-haven Gold price and remains supportive of the upwards move.
However, it remains to be seen if bulls can retain control or prefer to wait on the sidelines ahead of this week's release of the FOMC meeting minutes on Tuesday. Investors will get a fresh insight into the path of interest rates and policymakers' views on whether the US Central Bank should raise interest rates again this year. This, in turn, should provide some meaningful impetus to the non-yielding Gold price.
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