Gold price struggles to gain any meaningful traction amid a combination of diverging forces.
Geopolitical risks and China’s economic woes lend some support to the safe-haven XAU/USD.
Hawkish Fed expectations underpin the USD and act as a headwind for the non-yielding metal.
Gold price (XAU/USD) is seen oscillating in a narrow trading band during the Asian session on Tuesday and consolidating its recent losses, to over a one-week low around the $2,015 region touched the previous day. A slight deterioration in the global risk sentiment is seen as a key factor lending some support to the safe-haven precious metal, though a bullish US Dollar (USD) and bets that the Federal Reserve (Fed) might not cut interest rates as much as anticipated act as a headwind.
The incoming US macro data continue to point to a still resilient economy and give the Fed more headroom to keep rates higher for longer. Adding to this, hawkish comments by several Fed officials, including Fed Chair Jerome Powell, forced investors to continue scaling back their expectations for a more aggressive policy easing in 2024. This had been a key factor behind the recent sharp rise in the US Treasury bond yields, which should underpin the buck and cap gains for the Gold price
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