Gold experienced a decline amidst thin trading volumes due to public holidays in key Asian markets and the US. Prices fell over 1%, reaching around $4,920 per ounce, marking a second consecutive day of losses. Despite a brief recovery attempt, gold remains in negative territory, struggling below $4,950. Market participants are awaiting key economic data releases and geopolitical developments for further direction.
- Gold dropped to a one-week low near $4,850 before recovering slightly.
- US Dollar strength is hindering gold’s recovery.
- Markets are anticipating the FOMC Minutes and US PCE Price Index for insights into the Fed’s rate-cut path.
- Traders are pricing in expectations of more than two rate cuts by the Federal Reserve this year, with July as a potential starting point.
- US-Iran nuclear talks and Russia-Ukraine negotiations are adding to geopolitical uncertainty.
- Nervousness ahead of US-Iran nuclear talks could offer some support to gold.
- The prevailing risk-on environment may continue to undermine demand for gold.
The recent price action suggests a period of uncertainty for gold. The asset is currently influenced by conflicting forces, including expectations of monetary easing, geopolitical tensions, and risk appetite in equity markets. The direction of gold’s price movement will likely depend on upcoming economic data releases, central bank policy signals, and developments in global political affairs.