Gold trades with mild negative bias despite firmer Fed rate cut bets
- Gold price edges lower in Monday’s Asian session.
- Fed’s rate cut expectation and ongoing geopolitical tensions continue to underpin Gold price.
- The US July Durable Goods Orders are due later on Monday.
The Gold price (XAU/USD) trades with mild losses near the $2,500 psychological support on Monday. However, the downside of the precious metal might be limited amid rising expectations that the US Federal Reserve (Fed) will begin lowering borrowing costs in September. Lower interest rates are generally positive for Gold as it reduces the opportunity cost of holding the non-interest paying asset.
Furthermore, the escalating geopolitical tensions in the Middle East and the economic uncertainty are likely to boost the safe-haven demand, benefiting Gold price. On the other hand, the sluggish demand in the Chinese economy might undermine the yellow metal as China is the largest producer and consumer of gold worldwide. Later on Monday, the US July Durable Goods Orders are due. The highlights for this week will be the preliminary US Gross Domestic Product Annualized (GDP) for the second quarter and the Personal Consumption Expenditures-Price Index (PCE) for July, which will be released on Thursday and Friday, respectively.
Daily Digest Market Movers: Gold price loses momentum despite rising Fed rate cut expectations
- Fed Chair Powell said on Friday at the Kansas City Fed’s annual economic symposium in Jackson Hole, “The time has come for policy to adjust.”
- The July FOMC Minutes released last week indicated a “vast majority” of Fed officials believe a September cut will be appropriate so long as there are no data surprises.
- Philadelphia Fed President Patrick Harker said that he supports two or three interest rate cuts in 2024, barring any substantial changes to US economic data.
- Chicago Fed President Austan Goolsbee stated that monetary policy is currently at its most restrictive level, and the Fed’s focus is now shifting towards achieving its employment mandate.
- Hezbollah launched hundreds of rockets and drones at Israel early on Sunday, as Israel’s military said it carried out a wave of pre-emptive strikes across southern Lebanon to thwart a large-scale rocket and drone attack by Hezbollah, per Reuters.
Technical Analysis: Gold price continues its long-term bullish momentum
US Dollar price in the last 7 days
The table below shows the percentage change of US Dollar (USD) against listed major currencies in the last 7 days. US Dollar was the weakest against the Japanese Yen.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | -1.43% | -1.96% | -1.26% | -1.54% | -2.67% | -2.59% | -2.41% | |
| EUR | 1.41% | -0.53% | 0.18% | -0.10% | -1.23% | -1.15% | -0.95% | |
| GBP | 1.93% | 0.52% | 0.70% | 0.42% | -0.70% | -0.62% | -0.42% | |
| CAD | 1.23% | -0.18% | -0.71% | -0.28% | -1.42% | -1.33% | -1.13% | |
| AUD | 1.51% | 0.10% | -0.44% | 0.28% | -1.13% | -1.04% | -0.85% | |
| JPY | 2.63% | 1.21% | 0.72% | 1.42% | 1.13% | 0.12% | -9870.18% | |
| NZD | 2.53% | 1.13% | 0.61% | 1.31% | 1.03% | -0.08% | 0.19% | |
| CHF | 2.34% | 0.94% | 0.42% | 1.12% | 0.84% | -0.27% | -0.19% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).