Gold Price Forecast: XAU/USD loses ground below $2,040, US GDP data eyed
|- Gold price holds below the mid-$2,000s amid a stronger US Dollar.
- The Federal Reserve (Fed) officials warned patience is needed before beginning to cut rates.
- The ongoing Middle East geopolitical tensions might boost safe-haven flows and benefit the gold price.
Gold price (XAU/USD) trades in negative territory during the early Asian trading hours on Monday. However, the uncertainties surrounding the Federal Reserve’s (Fed) interest rate might lift the yellow metal ahead of the Core Personal Consumption Expenditures Price Index (Core CPI) on Thursday. At press time, gold price is trading at $2,034, losing 0.13% on the day.
The stronger-than-expected US inflation data in recent weeks has triggered market expectations of delaying the interest rate cuts. Last week, the Fed governor Christopher Waller said that Fed officials are in no rush to implement interest rate cuts. Investors expect that the US may not cut rates until June. That would far surpass previous expectations of March cuts. Traders are now pricing in the first rate cuts starting in June and the Fed’s most recent guidance pointed to three cuts this year.
The Houthis continue to attack commercial ships in the Red Sea and strengthen their weapons stockpile in Yemen, even though the US has carried out strikes on the group in recent weeks. The rising geopolitical tensions in the Middle East could boost the gold price as it’s perceived as a traditional safe-haven asset.
Looking ahead, gold traders will monitor the US Gross Domestic Product Annualized for the fourth quarter (Q4), due on Wednesday, and the Core Personal Consumption Expenditures Price Index (Core PCE) on Thursday. These data could give a clear direction to the gold price.
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.