Quotes and rates for precious metals Gold vs US Dollar (XAUUSD)

Last week, Gold (XAU/USD) recorded minor gains and ended above the $2,030 mark. Economists at ANZ Bank analyze the yellow metal’s outlook.

Fed officials warned patience is needed before they start cutting rates

• Gold price holds below the mid-$2,000s amid a stronger US Dollar. 
• The Federal Reserve (Fed) officials warned patience is needed before beginning to cut rates.
• The ongoing Middle East geopolitical tensions might boost safe-haven flows and benefit the gold price. 

Gold price (XAU/USD) trades in negative territory during the early Asian trading hours on Monday. However, the uncertainties surrounding the Federal Reserve’s (Fed) interest rate might lift the yellow metal ahead of the Core Personal Consumption Expenditures Price Index (Core CPI) on Thursday. At press time, gold price is trading at $2,034, losing 0.13% on the day. 

The stronger-than-expected US inflation data in recent weeks has triggered market expectations of delaying the interest rate cuts. Last week, the Fed governor Christopher Waller said that Fed officials are in no rush to implement interest rate cuts. Investors expect that the US may not cut rates until June. That would far surpass previous expectations of March cuts. Traders are now pricing in the first rate cuts starting in June and the Fed’s most recent guidance pointed to three cuts this year.  

The Houthis continue to attack commercial ships in the Red Sea and strengthen their weapons stockpile in Yemen, even though the US has carried out strikes on the group in recent weeks. The rising geopolitical tensions in the Middle East could boost the gold price as it’s perceived as a traditional safe-haven asset. 

Looking ahead, gold traders will monitor the US Gross Domestic Product Annualized for the fourth quarter (Q4), due on Wednesday, and the  Core Personal Consumption Expenditures Price Index (Core PCE) on Thursday. These data could give a clear direction to the gold price. 

Gold (XAU/USD) has put the previous week's setback behind it and established itself above $2,000. Economists at Commerzbank analyze the yellow metal’s outlook.

XAU/USD year-end forecast lowered by $50 to $2,100

Over the past six months, Gold prices have risen over 3%. Economists at ANZ Bank analyze the yellow metal’s outlook.

Gold’s recent price consolidation is likely to extend till the end of Q1

See – Gold Price Forecast: Fed policy will remain key to the outlook for XAU/USD in the months ahead – ING

Gold has been trading in a narrow range awaiting clues on the prospects for US interest rates. Economists at ING analyze the yellow metal’s outlook 

Gold awaits clues on Fed outlook

As the market pushed out US rate cut expectations, Gold (XAU/USD) fell 2% YTD, from a high of $2,135 in December 2023. Economists at ANZ Bank analyze the yellow metal’s outlook.

Gold to keep shining

• Gold price attracts some buyers around $2,020 in Tuesday’s early European session. 
• Higher-than-expected US inflation figures fuelled speculation of a delay in the Fed’s move towards monetary policy easing. 
• The rising Middle East geopolitical tensions and economic uncertainties lift the yellow metal. 
• The FOMC Meeting Minutes will be the highlight of this week. 

Gold price gains momentum for the fourth straight day during the early European session on Tuesday. The yellow metal trades in positive territory despite the rebound of the US Dollar (USD) and higher bond yields. Trading activity was low on Monday as markets closed in the US. However, investors will take more cues from the FOMC Minutes on Wednesday about the outlook for US interest rates. At press time, the gold price is trading at $2,020, adding 0.09% on the day. 

Meanwhile, the US Dollar Index (DXY), which measures the value of the USD relative to a basket of global currencies, posts modest gains near 104.35. The US Treasury yields edge higher, with the 10-year yield standing at 4.30%. 

Given the stronger-than-expected recent US data, investors lower their bets on the rate cut expectations, which provide some support for the US Dollar (USD). According to the CME FedWatch Tool, the markets have priced in the first 25 basis points (bps) rate cut by the Fed in the June 2024 meeting.

On the other hand, the global central banks are likely to diversify foreign reserves and accumulate gold to hedge in their portfolios amid ongoing geopolitical tensions in the Middle East and economic uncertainties. This, in turn, could boost the demand for gold, a traditional safe-haven asset.

The FOMC Meeting Minutes will be released on Wednesday, and it might provide further insights into why Fed officials are not confident enough to begin easing policy in Q1 2024. On Thursday, the preliminary US S&P Global PMI for February will be due. These events could give a clear direction to the gold price.

• Gold price loses ground as US Dollar improves on Tuesday.
• The improvement in US Treasury yields could impact the non-yield assets like Gold.
• Investors await FOMC minutes to gain the Fed's perspective on the interest rate trajectory.

Gold price moves slightly lower on Tuesday after halting its three-day winning streak, inching lower to near $2,018 per troy ounce during the Asian trading hours. Prices of the yellow metal encounter a challenge due to the strengthening US Dollar (USD), which can be attributed to higher US bond yields. This upward movement in bond yields has exerted downward pressure on non-yielding assets like Gold.

Furthermore, market participants are eagerly awaiting the release of the Federal Open Market Committee (FOMC) meeting minutes scheduled for Wednesday. This release could provide insight into the Federal Reserve's perspective on the future trajectory of interest rates.

However, ANZ forecasted that the Federal Reserve (Fed) will initiate the rate-cutting cycle starting from July 2024. According to the CME FedWatch Tool, there is a 53% possibility of a 25 basis points rate cut by the US Fed in the June meeting.

The recent dovish remarks from the Fed officials suggesting rate cuts in 2024 undermined the US Dollar on Monday. San Francisco Federal Reserve President Mary C. Daly mentioned that three rate cuts are a reasonable baseline for 2024. Additionally, St. Louis Federal Reserve (Fed) president, James Bullard suggested Federal Reserve consider lowering interest rates at its March meeting.

The US Dollar Index (DXY), which gauges the value of the US Dollar against six other major currencies, ends its four-day losing streak. The DXY trades higher around 104.40, with 2-year and 10-year yields on US bond coupons standing at 4.65% and 4.30%, respectively, at the current time.

Gold is forming one more base near the upper part of range. Economists at Société Générale analyze XAU/USD’s technical outlook.

First support at $1,973

• Gold price extends its winning streak for the third consecutive session on Monday.
• San Francisco Federal Reserve (Fed) President Mary C. Daly stated that three Fed rate cuts are possible in 2024.
• CME FedWatch Tool suggests a 52% probability of a 25 basis points rate cut in June.

Gold price continues to move on an upward trajectory, trading higher around $2,020 per troy ounce during the early European session on Monday. The precious metal receives upward support from cautious investor sentiment amid speculation about the Federal Reserve's interest rate policy.

The price of Gold surged as the US Dollar depreciated on San Francisco Federal Reserve (Fed) President Mary C. Daly’s remarks at the Annual National Association for Business Economics Economic Policy Conference. She stated that three rate cuts are a reasonable baseline for 2024. Daly emphasized that it's premature to consider allowing the economy to run without intervention. Additionally, former Fed official James Bullard's suggestion that the Fed should consider lowering interest rates at the March meeting to prevent hindering economic activity due to higher rates is contributing to market sentiment.

However, market sentiment indicates of no rate adjustments in the upcoming Federal Reserve meetings in March and May. According to the CME FedWatch Tool, there is approximately a 52% probability of a 25 basis points (bps) rate cut in June. On Friday, the US Dollar (USD) failed to sustain its gains, which were initially fueled by better-than-expected Producer Price Index (PPI) data from the United States, consequently leading to an increase in Gold price.

The US Producer Price Index (PPI) showed a year-over-year growth of 0.9%, against the expectations of 0.6% and the previous figure of 1.0%. Additionally, there was a monthly improvement of 0.3%, contrasting with the previous decline of 0.1%. However, the preliminary Michigan Consumer Sentiment Index rose to 79.6 from the previous 79.0, although it fell short of the anticipated reading of 80.0.

• Gold price edges higher to $2,014 amid the USD weakness.
• The US Producer Price Index (PPI) rose 0.3% MoM in January versus a 0.1% decline prior, the largest increase since August 2023.
• The ongoing geopolitical tensions in the Middle East might boost safe-haven flows and the gold price. 
• Traders will focus on the People's Bank of China's (PBOC) interest rate decision and the FOMC Minutes. 

Gold price (XAU/USD) holds above $2,000 during the early Asian session on Monday. US economic data suggests inflation is stickier than expected and prompted financial markets to dial back expectations that the Federal Reserve (Fed) would start cutting interest rates in June. At press time, the gold price is trading at $2,014, gaining 0.12% on the day. 

The Producer Price Index (PPI) for final demand rose 0.3% MoM in January from a 0.1% decline in December, the largest increase since August 2023. On an annual basis, the PPI figure climbed 0.9% YoY from a 1.0% rise in the previous reading. Meanwhile, US Housing Starts fell -14.8% from 1.562M to 1.331M, while Building Permits slumped -1.5%.

The markets anticipate the Fed to cut the interest rate this year, though the odds of a move in June are diminishing. The delay in interest rate cuts might weigh on the yellow gold. It’s worth noting that the high interest rate diminishes the appeal of non-yielding metals as it increases competition from higher-yielding investments.

The People's Bank of China (PBOC) will announce the interest rate decision on Tuesday, with no change in policy expected. Investors will also monitor the developments surrounding the additional stimulus measures from Chinese authorities in the coming months. 

Additionally, Hezbollah claimed to be acting in solidarity with its Gaza allies, Hamas and will continue to attack as long as Israel bombards the embattled Palestinian enclave. The rising geopolitical tensions in the Middle East might lift gold prices, a traditional safe-haven asset. 

Moving on, market participants await the PBoC Interest Rate Decision on Tuesday. The FOMC Minutes will be released on Wednesday and will be a closely watched event. Traders will take cues from the data and find trading opportunities around the gold price.