Gold price (XAU/USD) saw a modest increase to nearly $2,450 in Thursday’s early Asian session, breaking a two-day losing streak. The weaker US Dollar provided some support for the precious metal, with investors closely watching upcoming economic data releases.
The US CPI inflation rose as expected in July, with the headline Consumer Price Index (CPI) increasing 0.2% month-on-month, putting the annual inflation rate at 2.9%. The core CPI, excluding food and energy, also came in line with expectations at 0.2% month-on-month and a 3.2% annual rate.
Market strategist Phillip Streible noted that expectations for a 25 basis point rate cut by the Federal Reserve have increased, impacting the momentum in the gold market. However, there is still a 41% chance of a 50 basis point rate cut in September, down from 50% prior to the release of the CPI data.
Geopolitical tensions and economic uncertainty continue to be factors that could lift safe-haven assets like Gold. Iran’s dismissal of calls to refrain from retaliating against Israel after the assassination of a Hamas leader in Tehran adds to the global uncertainty.
Gold is widely seen as a safe-haven asset and a hedge against inflation and depreciating currencies. Central banks, including those from emerging economies like China, India, and Turkey, have been increasing their Gold reserves to support their currencies in turbulent times.
The price of Gold can be influenced by a variety of factors, including geopolitical instability, economic recessions, interest rates, and the strength of the US Dollar. As the asset is priced in dollars, a weaker Dollar tends to push Gold prices up.
Investors will be closely monitoring upcoming economic data releases and geopolitical developments to gauge the direction of Gold prices in the coming days.
Source: https://www.fxstreet.com/news/gold-price-forecast-xau-usd-trades-with-mild-gains-near-2-450-eyes-on-us-retail-sales-202408150033
