Gold prices (XAU/USD) inched higher during Friday’s Asian session, marking a recovery from a recent two-week low reached the day before, following a rebound in response to encouraging US economic data. Thursday’s release of the Advance US Gross Domestic Product (GDP) figures exceeded expectations, suggesting resilience in the economy. Moreover, signs of easing inflation in the second quarter of 2024 provided stability to financial markets, diverting investment away from traditional safe-haven assets like gold.
Despite these factors, XAU/USD managed to hold steady below its 50-day Simple Moving Average (SMA), supported by expectations that the Federal Reserve (Fed) might initiate interest rate cuts starting in September. This kept the US Dollar (USD) subdued, following a recent two-week high earlier in the week, thereby supporting demand for gold among investors. However, the upside potential remains capped as market participants await the release of the US Personal Consumption Expenditures (PCE) Price Index later on Friday. This data will be crucial in shaping expectations around the Fed’s future monetary policy actions, influencing both USD strength and the attractiveness of gold as a non-yielding asset.
Overall, market sentiment hinges on upcoming economic indicators, with the potential for fresh developments to sway the trajectory of gold prices in the near term.
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