Gold experienced a slight dip to approximately $3,360 per ounce on Monday, following a previous session gain, as the US dollar attempted to rebound. Market sentiment is currently influenced by dovish signals from the Federal Reserve, particularly regarding potential future rate cuts. Additionally, the ongoing tensions between Russia and Ukraine contribute to gold’s appeal as a safe-haven asset.
- Gold dipped to around $3,360 per ounce.
- The dip followed a more than 1% gain in the previous session.
- The US dollar attempted to recover.
- Fed Chair Jerome Powell signaled the possibility of rate cuts.
- Markets are nearly fully pricing in a 25bps cut in September.
- Escalating tensions between Russia and Ukraine boost the safety appeal for gold.
- Ukraine pledged to continue defending the nation.
- Moscow claimed Ukraine targeted Russian power and energy facilities.
The dynamics suggest a tug-of-war for gold’s price. The potential for lower interest rates makes gold more attractive, as it reduces the opportunity cost of holding the non-yielding asset. Concurrently, global uncertainty caused by geopolitical events strengthens its appeal as a safe harbor for investors. The combined effect of these factors could lead to price volatility in the near term as the market navigates these opposing forces.