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Gold prices fell to a two-week low on Thursday as signs of easing trade tensions boosted risk appetite and reduced golds safe-haven appeal, while a stronger dollar also weighed on gold prices. "The market remains confident that the United States will soon sign a lower tariff agreement with other countries, and this optimism, coupled with a stronger dollar, is weighing on gold prices," said Giovanni Staunovo, an analyst at UBS. Investors are waiting for Fridays non-farm payrolls report to gain further insight into the Feds policy direction. "A weak jobs report should support the Feds calls for further rate cuts this year and push gold prices back to $3,500 an ounce in the coming months," said Giovanni Staunovo.On May 1, institutional analysis pointed out that gold futures plummeted due to easing trade tensions and declining safe-haven demand. The strengthening of the US dollar further dampened enthusiasm for gold as a safe-haven asset and made dollar-denominated commodities more expensive for international buyers. The United States is likely to reach a trade agreement, and market optimism and risk appetite are rising. However, further losses may be limited because expectations of interest rate cuts have also been raised after the United States released a series of weak economic data. The US economy contracted by 0.3% in the first quarter. Lower interest rates usually stimulate demand for non-interest-bearing gold.Ukraines Foreign Minister: The EUs top diplomat has been informed of the mineral agreement reached with the United States.According to the Wall Street Journal: Citigroup hired Trumps former trade chief Robert Lighthizer.According to the Wall Street Journal: The U.S. government has commissioned L3Harris to completely transform a Boeing 747 once used by the Qatari government.

Forecast for Gold Price: XAU/USD seeks another run above $1,825 despite USD recovery

Alina Haynes

Jan 03, 2023 15:14

Gold price is nearing six-month highs while maintaining gains above the major resistance level of $1,825 thus far on Tuesday. The gold price is continuing its recent increase at the start of 2023, despite the general strengthening of the US dollar.

 

Concerns about a probable global economic slowdown, China's covid comeback, and rising inflation are dragging on market mood, hence pushing demand for the traditional safe-haven Gold price. Expectations that the US Federal Reserve (Fed) would continue its tightening cycle this year to combat rising inflation maintain investor mood generally negative.

 

The risk-off movements are also assisting the US Dollar in finding a floor, limiting the precious metal's advance. In addition, US Treasury bond yields ended the final week of 2022 on a positive note, reducing the Gold price's ability to rise.

 

The S&P Global Manufacturing PMI for December, the first relevant US economic data to be issued this year, will provide additional trade impetus. In addition, markets will closely watch the Wall Street opening for further risk sentiment indicators.

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