Daily Digest Market Movers: Gold price is pressured by fading safe-haven demand, hawkish Fed expectations
- Iran signaled that it has no plans to retaliate against the Israeli limited-scale missiles strike on Friday, easing fears about a further escalation of geopolitical tensions in the Middle East and undermining the safe-haven Gold price.
- Investors have pushed back their expectations about the timing of the first interest rate cut by the Federal Reserve to September and also downsized bets for the number of rate cuts in 2024 to two, or around 40 basis points.
- Chicago Fed President Austan Goolsbee argued on Friday that progress on US inflation has stalled this year and that it would make sense to wait to get more clarity on the inflation outlook before taking a policy step.
- The yield on the benchmark 10-year US government bond stands tall near a multi-month peak, which, in turn, is seen acting as a tailwind for the US Dollar and exerting additional pressure on the non-yielding yellow metal.
- Concerns about slowing global economic growth support prospects for synchronized interest-rate cuts by most major central banks in the second half of this year, which, in turn, could lend support to the XAU/USD.
- Traders might also wait for this week's release of flash global PMI prints, the Advance US Q1 GDP report, and the US Personal Consumption Expenditures (PCE) Price Index before placing fresh directional bets.
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