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

Physical Gold demand has been showing a strong resilience to higher prices since 2021. However, any further increase in physical demand will be limited, strategists at ANZ Bank say.

Higher prices could temper physical offtake this year

Economists at ANZ Bank analyze Gold (XAU/USD) outlook amid the uncertainties around geopolitics and high levels in stock markets.

Volatility to pick up as we get closer to the US elections

Gold is making some headway again after initially running out of steam following its rise to a new record level of $2,222 in the middle of last week. Economists at Commerzbank analyze the yellow metal’s outlook.

Next stress test for Gold: US PCE deflator 

• Gold Price extends gains around $2,171 amid the weaker USD.
• The upward momentum of gold prices is supported by the expectations of rate cuts by the Fed this year. 
• The escalating geopolitical tensions in both Eastern Europe and the Middle East might lift the gold price. 

Gold Price (XAU/USD) extends its upside above the mid-$2,150 during the early Asian trading hours on Tuesday. The expectations of interest rate cuts by the US Federal Reserve (Fed) this year and the dovish remarks from Fed officials weigh on the US Dollar (USD) and provide some support to the US Dollar-denominated Gold. At the press time, gold price is trading at $2,171, adding 0.04% on the day. 

Meanwhile, the US Dollar Index (DXY), a measure of the value of the USD against a weighted basket of currencies used by US trade partners, retreats from multi-week peaks of 104.50 and hovers around 104.20. The US Treasury bond yields edge slightly higher, with the 10-year yield standing at 4.25%.

The uptick in yellow metal is driven by higher bets on the rate cut expectation in 2024. However, traders will closely monitor the US Personal Consumption Expenditures Price Index (PCE) data for February on Friday for confirmation on the timing of rate cuts. The headline PCE is forecast to show an increase of 0.4% MoM, while the Core figure is expected to rise by 0.3% MoM. Traders have priced in a 70% probability of a June rate cut, versus 65% before the Fed's March meeting last week.

Russia carried out one of its most massive missile and drone attacks on Ukraine's energy infrastructure overnight into Friday since the start of its full-scale invasion more than two years ago, per CNN. That being said, the rising geopolitical tensions in both Eastern Europe and the Middle East could boost the safe-haven flows and benefit the gold price. 

Looking ahead, market players will focus on US Consumer Confidence by the Conference Board, Durable Goods Orders, and the FHFA’s House Price Index on Tuesday. Later this week, the US Gross Domestic Product Annualized for the fourth quarter (Q4) will be due on Thursday, and the US PCE report will be released on Friday. 

Economists at Société Générale analyze Gold (XAU/USD) technical outlook.

Pause likely short-lived

• Gold price edges higher on subdued Greenback on Monday.
• The US Dollar receives downward pressure on speculations of the Fed initiating rate cuts from June.
• Gold price could face challenge as US Treasury yields move lower on improved risk sentiment.

Gold price rises to near $2,170 per troy ounce, reclaiming losses from the previous two sessions. The uptick in Gold prices can be attributed to a weaker US Dollar (USD), which is influenced by the dovish sentiment surrounding the Federal Reserve's stance on interest rate trajectory. Market sentiment leans toward the Fed initiating interest rate cuts starting in June, and a softer Greenback has bolstered the appeal of bullion.

During a press conference, Federal Reserve Chair Jerome Powell noted that an unexpected rise in unemployment could lead the central bank to consider lowering interest rates. Powell also reassured markets that the Fed would not hastily respond to consecutive months of elevated inflation figures. Furthermore, Gold prices have been buoyed by recent indications from Fed policymakers that they still anticipate reducing interest rates by three-quarters of a percentage point by the end of 2024, despite recent high inflation readings.

Indeed, the decline in US yields indicates a shift in investor sentiment toward US Treasury bonds, potentially posing a challenge for non-yielding assets like Gold. With the 2-year and 10-year yields on US Treasury bonds holding steady at 4.60% and 4.21%, respectively. Investors may find the relative safety and stability of bonds more attractive compared to Gold.

The upcoming US inflation readings are expected to have a significant impact on the prices of the precious metal. Gold traders will closely monitor the release of Gross Domestic Product (GDP) data for the fourth quarter of 2023 and the Personal Consumption Expenditures (PCE) price index report from the United States (US) during the week, as these indicators can provide insights into inflationary pressures and influence Gold prices accordingly.

• Gold price posts modest gains near $2,168 in Monday’s early Asian session. 
• The FOMC maintained its outlook for three quarter-point rate cuts this year, which benefit the gold price. 
• The rising geopolitical tension in Ukraine might boost safe-haven assets like gold prices. 

Gold price (XAU/USD) holds above the mid-$2,100s during the early Asian trading hours on Monday. The recovery of the yellow metal is bolstered by the higher possibility that the US Federal Reserve (Fed) could start cutting rates later this year. Traders await the US Gross Domestic Product (GDP) numbers for the fourth quarter (Q4) for fresh impetus, which is estimated to remain steady at 3.2%. Gold price currently trades around $2,168, gaining 0.15% on the day. 

Last week, the Fed left its benchmark interest rate unchanged for the fifth consecutive meeting at its 5.25% to 5.50% range after its March meeting. The Fed Chairman Jerome Powell hinted that the central bank was on course for three interest rate cuts in 2024, which fuel more investor demand for the precious metal and lift the gold price. Investors have priced in a 72% odds that the Fed will start cutting rates in the June meeting, up from 65% before the rate decision, according to the CME FedWatch Tool. 

Furthermore, the escalating geopolitical tension in Ukraine might boost the safe-haven flows, benefiting the gold price. On Sunday, an underground gas storage facility in Ukraine was attacked in the latest round of Russian missile attacks on power facilities. Ukraine President Volodymyr Zelenskiy said attempts to restore power supply were underway in several locations, with the most challenging situation in Kharkiv, Ukraine's second-largest city, per Reuters. 

Looking ahead, gold traders will closely watch the US GDP growth numbers Annualized for Q4. If the report shows stronger-than-expected data, this could provide some support to the Greenback and weigh on the US Dollar-denominated Gold. On Friday, the markets will be closed for Good Friday.
 

Gold rose to a new record high of $2,200 after the Fed meeting. Strategists at Commerzbank analyze the yellow metal’s outlook.

The rally on the Gold market is likely to be over for the time being

Gold surged to a record high as the prospect of rate cuts from the Fed rose. Economists at ANZ Bank analyze the yellow metal’s outlook.

The Fed maintained its outlook for three rate cuts this year

Gold has risen above $2,200 for the first time on a dovish Fed. Economists at MUFG Bank analyze the yellow metal’s outlook.

Short-term moves will remain tied to data potentially influencing Fed decision-making

Gold is making new highs. Economists at  Société Générale analyze the yellow metal’s outlook.

Objectives at $2,250/$2,360 after vaulting upper limit of multi-year range

After a brief dip just below $2,150, Gold started to recover at the start of the new week. Strategists at Commerzbank analyze the yellow metal’s outlook.

US data has been mixed of late

The Gold price rally towards the $2,200 level is beyond explanation by macroeconomic and geopolitical developments, economists at ANZ Bank say.

Gold rally is way ahead of weakness in the US Dollar

• Gold price edges lower near $2,155 in Monday’s early Asian session. 
• FOMC is likely to hold rates at its March meeting on Wednesday and will not rush to cut rates.
• Chinese policymakers emphasized the need for continued implementation of a proactive fiscal policy and enhancing the country's economic recovery.
• The Chinese February Retail Sales and Industrial Production will be due on Monday. 

Gold Price (XAU/USD) hovers around $2,155 during the early Asian trading hours on Monday. The downtick of yellow metal is backed by US February stronger-than-expected inflation data, which might delay the interest rate cuts by the Federal Reserve (Fed). Meanwhile, the positive developments surrounding stimulus measures from Chinese authorities or strong demand from China might lift the gold price. 

The recent US economic data suggests that inflation remains elevated, and this might convince the Fed to remain on hold until there is more evidence of inflation easing. The markets anticipate that the FOMC will hold its interest rate at its March meeting on Wednesday, and there will be no rush to cut rates as Fed officials need more time to gain greater confidence to bring inflation down to the central bank target. It’s worth noting that the high for a longer rate could diminish the appeal of non-yielding metals and weigh on the gold price. 

The University of Michigan revealed on Friday that the Consumer Sentiment Index came in weaker than expected, dropping to 76.5 in March from 76.9 in the previous reading. Meanwhile, the one-year and five-year inflation expectations were unchanged at 3.0% and 2.9%, respectively. Finally, US Industrial Production improved to 0.1% MoM in February from a downwardly revised -0.5% MoM in January. 

On the weekend, China's finance minister Lan Fo emphasized the need for continued implementation of a proactive fiscal policy and enhancing the country's economic recovery. Investors have increased their bets that policymakers would implement additional monetary easing measures, including a reduction in bank reserves. The positive developments surrounding the Chinese economy might boost the gold price, as China is the world's second-largest economy and the world’s major buyer of gold.

Gold traders will closely monitor the Chinese Retail Sales and Industrial Production for February, due on Monday. The FOMC interest rate decision and press conference will be in the spotlight on Wednesday. These events could give a clear direction to the gold price. 

Gold’s rally has not been deterred by the pushing out of expectations around the timing of Federal Reserve rate cuts. Economists at ANZ Bank analyze the yellow metal’s outlook.

Macroeconomic and geopolitical backdrop remains supportive 

The recent rise in the Gold price cannot be adequately explained in fundamental terms, which is why a price correction is likely in the short term, strategists at Commerzbank say.

Will XAU/USD rally continue?

The strength of the Gold price is a little puzzling. Economists at Commerzbank analyze the yellow metal’s outlook.

A Fed rate cut has hardly moved any closer for most market participants

Gold price has been scaling new highs in March. Economists at ANZ Bank analyze the yellow metal’s outlook.

Lifting the baseline of the Gold price range

See – Gold Price Forecast: XAU/USD well positioned to hit $2,250 Q2 target – TDS

Gold prices fell only briefly on the back of stronger-than-expected US inflation data. Economists at Commerzbank analyze the yellow metal’s outlook.

Gold stabilises just below record high