- The price of gold fell below the $2320 per ounce level on Wednesday, influenced by waning demand for safe-haven assets as investors moved into riskier assets following easing tensions in the Middle East.
- Meanwhile, traders are awaiting the release of US consumer personal spending (PCE) data for March, the Federal Reserve’s preferred gauge of inflation, for further clarification on the Fed’s likely monetary path.
US PMI data came in below expectations yesterday, according to economic calendar data, and showed the country’s slowest private sector growth since December, easing concerns about the resilient US economy. Additionally, the price component of the report indicated a slowdown in input costs. This latest economic data has rekindled hopes for a less restrictive monetary path.
Previously, strong inflation data and hawkish comments from Fed officials had led markets to reduce expectations for monetary policy easing to just a rate discount this year.
According to gold trading platforms, the XAUUSD gold price continued its losses after its biggest daily decline in nearly two years, as investors focused on easing tensions in the Middle East and signs that the Fed will keep US rates high for longer. After soaring to an all-time high earlier this month, the precious metal has fallen below $2,300 an ounce. Gold prices fell 2.7% on Monday as fears of an escalation in the conflict between Israel and Iran faded. Tehran downplayed the impact and relevance of the recent Tel Aviv attack, saying: “Israel has received the necessary response at this stage.”
Overall, the yellow metal is still up about 15% since mid-February, with gains supported by global geopolitical risks, central bank buying and Chinese consumer demand. Recently, gold prices have risen despite the advance of the US dollar and Treasury yields, amid signs that the Fed will delay its long-awaited change of course. Ultimately, as markets continue to reduce expectations for monetary easing this year, the higher rate environment for a longer period could weigh on gold, which offers no yield.
Gold Price Forecast and Analysis Today:
According to the performance on the daily chart, with the recent losses in gold prices, there has been a break in the overall upward trend. The bears will increase their control on the trend if gold prices move to the support levels of $2260 and $2175 respectively. Overall, we continue to prefer buying gold at any downside level as global geopolitical tensions are not over yet and gold purchases by central banks and individuals remain at record levels.
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