As the Gold price (XAU/USD) continues to trade in negative territory for the third consecutive day in the early Asian session on Tuesday, investors are closely watching the impact of rising US Fed rate cut bets and geopolitical risks on the precious metal. The stronger US Dollar and higher US Treasury bond yields are putting pressure on Gold, but the anticipation of a Fed interest rate cut in September could provide support as lower rates reduce the opportunity cost of holding non-yielding assets like Gold. Additionally, ongoing geopolitical tensions in the Middle East are boosting safe-haven demand for Gold.
Looking ahead, market participants are awaiting the release of the US August ISM PMI for fresh market impetus. The highlight of the week will be the US Nonfarm Payrolls (NFP) report for August, which could influence the pace of the Fed’s interest rate cut decision and subsequently impact the Gold price in the short term.
Daily Digest Market Movers: Gold Price Faces Selling Pressure Amid USD Rebound
- Protests in Israel escalate over failed ceasefire-for-hostages deal with Hamas.
- China’s Caixin Manufacturing PMI surpasses market expectations in August.
- US ISM Manufacturing and Services PMI data releases expected to influence market sentiment.
- US Nonfarm Payrolls report anticipated to show job additions and impact Fed rate cut decisions.
- Markets pricing in high probability of Fed rate cut in September.
Technical Analysis: Gold Price Maintains Positive Momentum
Despite the current downward trend in Gold price, the longer-term outlook remains positive. The daily chart shows the price well above the key 100-day Exponential Moving Average (EMA), indicating a bullish trend. The 14-day Relative Strength Index (RSI) also supports the upward momentum, suggesting a potential rally towards the $2,600 psychological level. On the downside, initial support levels are identified at $2,470 and $2,432, with the 100-day EMA at $2,372 serving as a critical level to watch.
Gold FAQs
Gold is a valuable asset with a long history of being used as a store of value and a safe-haven investment. Central banks hold significant amounts of Gold to support their currencies and diversify reserves. The price of Gold is influenced by various factors, including geopolitical tensions, economic data releases, and currency movements. Understanding these factors can help investors make informed decisions about their finances and investments.