Gold price (XAU/USD) edges higher during the Asian session on Monday and for now, seems to have stalled last week’s modest pullback from the vicinity of the $2,050 area. The Federal Reserve (Fed) last Wednesday signaled an end to its monetary policy tightening cycle and the so-called “dot plot” penciled in at least three 25 basis points (bps) rate cuts in 2024. This, in turn, fails to assist the US Dollar (USD) to build on Friday’s goodish recovery move from its lowest level since July 31. Apart from this, geopolitical risks and worries about a deeper economic downturn, particularly in China and the Eurozone, act as a tailwind for the safe-haven precious metal.
That said, top Fed officials tried to temper speculation about early interest rate cuts on Friday. This, along with the prevalent risk-on environment might keep a lid on any meaningful appreciating move for the Gold price. Against the backdrop of the Fed’s dovish pivot last week, the optimistic outlook from China’s Central Finance Office continues to boost investors’ confidence. This is evident from a generally positive tone around the equity markets and should cap the upside for the XAU/USD in the absence of any relevant market-moving economic releases from the US. The downside, however, remains cushioned in the wake of the Fed’s dovish pivot last week.
Source: Fxstreet
