In the early hours of Monday, gold prices (XAU/USD) have attracted some buying interest, showing signs of stabilizing after a three-day corrective decline from last week’s all-time highs. This stabilization comes as expectations of a dovish Federal Reserve (Fed) and recent political developments in the United States create a mixed environment for the markets. Specifically, US President Joe Biden’s withdrawal from the presidential race has led some investors to reassess their positions, particularly those betting on a victory for Donald Trump. This shift has left the US Dollar (USD) under pressure and provided a degree of support for gold.
Contributing to gold’s appeal is a backdrop of growing concerns over slowing economic growth in China, persistent geopolitical tensions related to the ongoing Russia-Ukraine conflict, and unrest in the Middle East. These factors have further bolstered gold’s status as a safe-haven asset.
Despite this, the XAU/USD pair has not seen sustained buying momentum. Traders are now focusing on the upcoming release of the US Personal Consumption Expenditures (PCE) Price Index data, scheduled for Friday. This data is anticipated to offer critical insights into the Fed’s future policy direction, which will likely influence the near-term outlook for gold, a non-yielding asset.
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