Gold in search of a firm direction, stuck in a range below $1430 area
|- Tempered Fed rate cut expectations underpinned the USD and capped gains.
- Improving risk sentiment further weighed on the metal’s safe-haven status.
- Global growth concerns extend some support and helped limit deeper losses.
Gold extended its sideways consolidative price action through the mid-European session on Monday and remained confined in a narrow trading band, around the $1425 region.
After Friday's sharp intraday pullback from fresh multi-year tops, a combination of diverging forces failed to provide any meaningful impetus and led to a subdued/range-bound price action on the first day of a new trading week.
The US Dollar remained supported by the fact that St. Louis Fed President James Bullard on Friday ruled out the possibilities of 50 bps rate cut and said that the current US economic condition doesn't warrant a larger cut.
The comments forced investors to scale back expectations for an aggressive Fed rate cut move at the upcoming FOMC monetary policy meeting on July 30-31 and drove flows away from the non-yielding yellow metal.
This coupled with a slight improvement in the global risk sentiment, as depicted by a positive tone around equity markets, further weighed on the precious metal's relative safe-haven status and kept a lid on any positive move.
The negative factors, to some extent, were largely offset by concerns over the effect of heightened trade tensions on the outlook for growth, which seemed to be the only factor that might help limit the downside, at least for now.
In the absence of any major market-moving economic releases from the US, the broader market risk sentiment and the USD price dynamics might produce some short-term trading opportunities through the US session on Monday.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.