Gold Inches Higher and Climbs out of Its Two-Month Rut
Gold price (XAU/USD) is seeing some action and trading higher as USD bulls stay on the offensive.
Conflict in the Middle East is making gold more desirable, painting it as a safe financial haven in uncertain times. There is no major gold price movement, but the slight uptick is appreciated.
US Treasury bond yields are sliding, and USD’s price is chilling, creating a small buyers’ market for gold that looks hopeful. As tensions rise in the Middle East, gold and oil should both become more sought after commodities. Gains may be capped for gold as Federal Reserve interest rate cuts are being held back.
Gold is receiving some support from USD, which is experiencing its highest level for about three months. The dollar rose sharply on Tuesday but then started to decline into Wednesday and continued to fall Thursday. The dollar has not lost its recent gains, though.
Upcoming Data to Watch for
The US economic docket includes Retail Sales numbers as well as Weekly Initial Jobless Claims, Industrial Production data, and Empire State manufacturing Index. All of that could move the US dollar and give XAU/USD some momentum in one direction or another. If this data is anything like what we have been seeing from US economic data for the year so far, it will be broadly positive but somewhat mixed, with a few numbers looking better than expected.
We could start to see meaningful movement for the gold price as a result. Expectations for the US economy are certainly low, as it is still in a post-pandemic lull. But growth is happening at a higher than expected rate, although that is offset by US-Middle East relations.
Israel’s military started striking Lebanon with fighter jet attacks on Wednesday, hitting back for a rocket that struck Northern Israel. There is no indication that hostilities between these two countries will slow down anytime soon. Continued conflict there will affect USD’s price and the gold price, so investors should be watching that news space.
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