Gold prices (XAU/USD) found some support near the $2,317 region during the Asian session on Monday, halting a retracement slide from a two-week high touched on Friday. This stability in gold prices comes amidst growing acceptance that the Federal Reserve (Fed) will commence its rate-cutting cycle in September, spurred by signs of easing inflationary pressures. The non-yielding yellow metal has also benefitted from a softer risk tone, ongoing geopolitical tensions, and political uncertainty in Europe, all of which have bolstered its appeal as a safe-haven asset.
The financial landscape, however, remains complex. Stronger-than-expected US Purchasing Managers’ Index (PMI) data released on Friday pointed to a resilient economy, a factor that, coupled with the Fed’s hawkish stance earlier this month, has continued to support the US Dollar (USD). The Fed’s recent forecast suggests only one rate cut in 2024, which may limit any significant upside for gold prices.
Economic Calendar on 21/06/24 (fxstreet)
Market participants are adopting a cautious approach ahead of key economic data releases this week, including the final US Q1 GDP print and the Personal Consumption Expenditures (PCE) Price Index. These reports are expected to provide further clarity on the economic outlook and influence trading strategies.
As traders navigate these mixed signals, gold’s performance will likely remain influenced by the interplay of economic data, central bank policies, and geopolitical developments. Investors will be closely watching the Fed’s policy moves, economic indicators, and global political events to gauge the future direction of gold prices.