- XAUUSD gold price fell below the $2320 level per ounce on Wednesday, under the influence of declining demand for safe-haven assets as investors shifted towards riskier assets following the easing of tensions in the Middle East.
- Meanwhile, traders are now awaiting the release of US personal consumption expenditure (PCE) data for March, the Federal Reserve’s preferred inflation gauge, for further clarity on the Fed’s likely monetary path.
Yesterday, according to economic calendar data, US PMI data came in weaker than expected and showed the slowest private sector growth in the country since December, easing concerns about the resilient US economy. Additionally, the prices component of the report indicated a slowdown in input costs. This latest economic number had revived hopes for a less restrictive monetary path.
Previously, strong inflation data and hawkish comments from Fed officials had led markets to trim their expectations for policy easing to just one rate cut this year.
According to gold trading platforms, XAUUSD gold price continued its losses after its biggest daily drop in nearly two years, as investors focused on easing Middle East tensions and signals that the Fed will keep US rates high for longer. After soaring to a record high earlier this month, the precious metal fell below $2300 an ounce. On Monday, Gold prices fell 2.7% as fears of an escalation in the conflict between Israel and Iran faded. Tehran downplayed the impact and significance of Tel Aviv’s recent strike, said, “Israel had received “the necessary response at this stage.”
Overall, the yellow metal is still up about 15% since mid-February, with gains supported by geopolitical risks, global central bank buying, and Chinese consumer demand. Recently, gold prices have risen despite the advance of the US dollar and Treasury yields amid signals that the Fed will delay its long-awaited pivot. Ultimately, as markets continue to trim expectations for monetary easing this year, the higher-for-longer interest rate environment could weigh on gold, which carries no yield.
Gold Price Forecast and Analysis Today:
According to the performance on the daily chart, with the recent losses in gold prices, there has been a break in the general upward trend. The bears will increase their control of the trend if gold prices move to the support levels of $2260 and $2175 respectively. In general, we still prefer to buy gold at any downward level as global geopolitical tensions are not over yet and central bank and individual gold buying remains at record levels.
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