Gold Price Forecast: XAU/USD holds below $2,350, geopolitical risks remain in focus
Trending Articles- Gold remains bid as lack of Fed clarity and geopolitical frictions persist
- U.S. November Nonfarm Payrolls: What Does the Rare "Weak Jobs, Strong Economy" Mix Mean for U.S. Equities?
- Tesla Stock Hits Record High as Robotaxi Tests Ignite Market. Why Is Goldman Sachs Pouring Cold Water on Tesla?
- U.S. November CPI: How Will Inflation Fluctuations Transmit to US Stocks? Tariffs Are the Key!
- AUD/USD remains depressed below mid-0.6600s; downside seems limited ahead of US NFP report
- When is the BoJ rate decision and how could it affect USD/JPY?
■ Gold price trades softer around $2,325 in Monday’s early Asian session.
■ The US PCE price index was not sufficient to prompt the Federal Reserve (Fed) rate cut, weighing on the yellow metal.
■ Israeli Prime Minister begrudgingly accepted the US President's plan for a ceasefire in Gaza on Sunday.
Gold price (XAU/USD) edges lower to $2,325 on Monday during the early Asian trading hours. The yellow metal trims gains after the US Personal Consumption Expenditure (PCE) data for April showed price pressures cooled in April. Meanwhile, the ongoing Middle East geopolitical risks might provide some support to gold, traditional safe-haven assets.
The recent US PCE inflation report was not sufficient to prompt a Federal Reserve (Fed) rate cut, and the central bank might need some time to achieve its goal. Investors initially anticipated the first rate cut to come in March, but it got pushed to September. This, in turn, weighs on the precious metal as it increases the opportunity cost of holding the non-yielding asset.
The US PCE price index rose 0.3% MoM in April, while the annual PCE figure increased 2.7% YoY. Both figures came in as expected, according to the Commerce Department, on Friday. Meanwhile, the Core PCE, excluding volatile food and energy, advanced 0.2% MoM in April as compared to a 0.3% gain in March. On an annual basis, the core PCE price index climbed 2.8% for the third consecutive month.
On Sunday, Israeli Prime Minister Benjamin Netanyahu's administration reluctantly agreed to President Biden's proposal for a Gaza cease-fire. The negotiations take place as the attack in Rafah continues after intensive Israeli airstrikes over the weekend, per the BBC. Investors will monitor the developments surrounding the geopolitical tensions. Any signs of escalating risks could boost safe-haven flows, benefiting the gold price.
Read more
* 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.
