Gold Price Consolidates Around $1,920 as Economic Woes and Key US Releases Await
The price of GOLD struggled to gain significant momentum on Tuesday, remaining within a narrow trading range around $1,920 during the Asian session. Notably, the XAU/USD has managed to rise above the 200-hour Simple Moving Average (SMA) for the first time since June 16, indicating a potential recovery from the three-and-a-half-month low of $1,893 reached last week.
Weaker economic data from the United States has raised doubts about the need for further tightening of monetary policy by the Federal Reserve (Fed), keeping the US Dollar (USD) under pressure and providing support to the safe-haven gold price. The recent deceleration of the annual PCE Price Index and the contraction in the Institute for Supply Management’s (ISM) Manufacturing PMI have contributed to concerns about a global economic downturn, further favoring gold.
Traders are now eagerly awaiting key releases from the US, including the minutes of the June Federal Open Market Committee (FOMC) meeting and the Nonfarm Payrolls (NFP) report, which will provide insights into the Fed’s future rate-hike path.
Despite the supportive factors, the gold price remains below the one-week high reached on Monday, prompting caution among traders before making aggressive bullish bets.
It’s important to note that hawkish central banks and the recent risk-on sentiment in global equity markets may pose challenges for the non-yielding gold price. Therefore, a confirmation of a near-term bottom and strong follow-through buying are necessary before anticipating a significant upward move.
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