Gold Price Forecast: XAU/USD extends downside to near $3,250 on better risk appetite
Gold price edges lower to near $3,265 in Monday’s early Asian session.
US-China trade agreement diminished investors’ appetite for Gold.
Safe-haven flows and optimism of a Fed rate cut might cap the Gold’s downside.
The Gold price (XAU/USD) extends the decline to around $3,265 during the early Asian session on Monday. The precious metal tumbles to near one-month low after a United States (US)-China trade agreement boosted risk appetite. Investors await the Fedspeak later on Monday for fresh impetus.
A trade deal reached between the US and China last week on how to expedite rare earth shipments to the US was viewed positively by markets. This, in turn, diminished bullion's appeal as a safe-haven asset. Additionally, the ceasefire deal between Iran and Israel last week contributes to the yellow metal’s downside.
“The slowdown in geopolitics has offered an opportunity for investors to start taking profit because of the forward-looking prospects of some kind of kinetic war with China and the developments in the Middle East,” said Daniel Pavilonis, senior market strategist at RJO Futures.
On the other hand, any renewed geopolitical tensions or trade uncertainty triggered by US President Donald Trump could prompt central bank buying and increasing demand for the precious metal, a traditional, safe-haven asset.
Increased optimism of a Federal Reserve (Fed) rate cut might also lift the non-interest-bearing bullion. Traders raise bets that the US central bank will cut rates more times this year and possibly sooner than previously expected as US data released Friday showed an unexpected fall in consumer spending.
* The content presented above, whether from a third party or not, is considered as general advice only. This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.
