Gold prices (XAU/USD) extended their upward trajectory on Tuesday, marking the second consecutive day of gains and the fifth positive session out of the last six. The precious metal surpassed the $2,430 mark during early European trading, although it remained below Monday’s peak since May 20, primarily influenced by renewed USD buying. Additionally, the prevailing risk-on sentiment in markets acted as a limiting factor on the upside for gold, traditionally considered a safe-haven asset.
In the near term, market sentiment appears decisively bullish, buoyed by increasing expectations that the Federal Reserve (Fed) will commence interest rate cuts starting in September. This sentiment was reinforced by recent remarks from Fed Chair Jerome Powell, which have kept US Treasury bond yields subdued and bolstered the optimistic outlook for the non-yielding yellow metal. Investors are now turning their attention to the upcoming release of US monthly Retail Sales data, which is expected to provide fresh direction for gold prices.
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