- Gold price extends losses as the Greenback continues to move in an upward direction.
- Gold faces challenges due to the reduced risk premium from the lack of escalation in the Israel-Hamas conflict.
- Upgrading China’s GDP growth could lead to an increase in Gold prices.
Gold price continues to move on a downward trajectory due to the rebound in the US Dollar (USD). The price of Gold trades lower around $1,970 per troy ounce during the Asian session on Wednesday.
The price of gold also faces challenges, partly because traders have factored in a reduced risk premium from the Israel-Hamas conflict. The lack of escalation in the conflict has diminished safe-haven demand for Gold.
International Monetary Fund (IMF) has revised China's Gross Domestic Product (GDP) growth projections, anticipating a growth rate of 5.4% in 2023, up from the initial forecast of 5.0%, and 4.6% in 2024, surpassing the previous estimate of 4.2%. A positive shift in China's economic landscape could lead to an increase in Gold prices.
Moreover, the recent decline in US Treasury yields seems to be tied to an optimistic mood on Wall Street, which dampens the demand for safe-haven assets like Gold. Market participants are speculating on the possibility of the US Federal Reserve (Fed) holding off on interest rate hikes in future meetings. This sentiment is fueled by both the disappointing Non-Farm Payrolls data from last Friday and the dovish stance adopted by the Fed in November's meeting.
Member of the Federal Reserve Board of Governors, Lisa Cook mentioned on Monday that the current interest rate policy is considered sufficiently restrictive to maintain price stability.
However, the US Dollar (USD) strengthened after Minneapolis Fed President Neel Kashkari made a statement on Tuesday, cautioning against prematurely declaring the end of the Fed's rate hike cycle. Kashkari raised doubts about the adequacy of current policy in light of the robust economy, suggesting that a rise in inflation might warrant additional tightening.
Additionally, Chicago Fed President Austan Goolsbee recognized advancements in managing inflation and hinted that the discussion's focal point could transition to determining the duration for which interest rates should be maintained at their present level.
Investors are likely to keenly observe for additional insights into the potential trajectory of interest rates from the Fed Chairman Jerome Powell’s speech at a conference in Washington, DC on Wednesday, hosted by the Division of Research and Statistics.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD retreats toward 1.0850 on modest USD recovery
EUR/USD stays under modest bearish pressure and trades in negative territory at around 1.0850 after closing modestly lower on Thursday. In the absence of macroeconomic data releases, investors will continue to pay close attention to comments from Federal Reserve officials.
GBP/USD holds above 1.2650 following earlier decline
GBP/USD edges higher after falling to a daily low below 1.2650 in the European session on Friday. The US Dollar holds its ground following the selloff seen after April inflation data and makes it difficult for the pair to extend its rebound. Fed policymakers are scheduled to speak later in the day.
Gold climbs to multi-week highs above $2,400
Gold gathered bullish momentum and touched its highest level in nearly a month above $2,400. Although the benchmark 10-year US yield holds steady at around 4.4%, the cautious market stance supports XAU/USD heading into the weekend.
Chainlink social dominance hits six-month peak as LINK extends gains
-637336005550289133_XtraSmall.jpg)
Chainlink (LINK) social dominance increased sharply on Friday, exceeding levels seen in the past six months, along with the token’s price rally that started on Wednesday.
Week ahead: Flash PMIs, UK and Japan CPIs in focus – RBNZ to hold rates
After cool US CPI, attention shifts to UK and Japanese inflation. Flash PMIs will be watched too amid signs of a rebound in Europe. Fed to stay in the spotlight as plethora of speakers, minutes on tap.