Gold Price Falls to $2,365 Amid Fed Rate Cut Speculations and Global Risks

Gold prices have dipped to a two-week low during Thursday’s Asian session, with XAU/USD falling to around $2,365.

However, several factors have helped limit further losses. The expectation that the Federal Reserve will start reducing interest rates in September has kept the US Dollar subdued, providing some support for gold. Additionally, the broader risk-off mood in global equity markets, which typically benefits safe-haven assets like gold, has also contributed to stabilizing its price.

Market Sentiment and Federal Reserve Expectations

Despite the recent sell-off, gold found some buyers near the $2,365 level, mitigating further intraday losses. This buying interest is underpinned by a weakening global risk sentiment, highlighted by disappointing global flash PMIs indicating a slowdown, which bolsters the appeal of gold. Moreover, comments from former New York Federal Reserve President William Dudley advocating for a rate cut as soon as next week have reinforced expectations for an imminent easing of monetary policy. These dovish signals from the Fed are closely watched by traders, with the market fully pricing in a 25 basis point rate cut in September, and further cuts anticipated in November and December.

Upcoming Economic Indicators

Investors are now looking towards crucial US economic data for further direction. The upcoming Advance Q2 GDP figures and the Personal Consumption Expenditures (PCE) Price Index are key indicators that could influence the Fed’s policy path and, consequently, the gold market. With US political uncertainties also in play, these economic releases are critical for setting the tone in the gold market as traders evaluate the potential impact on XAU/USD prices.

Gold Price Forecast: Technical Outlook

ABOUT THE AUTHOR See More

Arslan Butt

Index & Commodity Analyst

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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