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Gold price

The price of gold, denoted as XAU/USD, has attracted buyers for the second consecutive day on Friday, hovering just below the recent high point before the European trading session begins. This renewed interest in gold follows the release of the US GDP report on Thursday, which highlighted a notable slowdown in economic growth at the beginning of 2024, coupled with an undesirable increase in inflation. This economic data has encouraged some investors to turn to gold as a safe-haven asset. However, the upward movement lacks strong bullish momentum due to a resurgence in US Dollar buying, supported by expectations of a more aggressive stance from the Federal Reserve.
Investors appear convinced that the Fed will postpone interest rate cuts due to persistent inflationary pressures, which maintain elevated yields on US Treasury bonds and bolster demand for the US Dollar. Additionally, a generally positive sentiment in equity markets acts as a limiting factor on gains for gold, which is typically sought after in times of market uncertainty.
Traders are now awaiting the release of the US Personal Consumption Expenditures (PCE) Price Index, which will provide insight into the Fed's future monetary policy decisions. This data will likely influence the next directional movement for gold, a commodity that does not offer yield but is often considered a hedge against economic uncertainty.

Dr. Kamaran Qader Yaqub,
Financial consultant at Investment Spot company. 

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