- 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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD steady below 1.0800 after US PCE meets expectations
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair barely reacted to US PCE inflation data, with the Greenback shedding some pips. Fed Chair Jerome Powell set to speak ahead of the weekly close.
GBP/USD hovers around 1.2620 in dull trading
GBP/USD trades sideways above 1.2600 amid a widespread holiday restraining action across financial markets. Investors took a long weekend ahead of critical United States employment data next week. Fed Chair Powell coming up next.
Gold price sits at all-time highs above $2,230
Gold price holds near a fresh all-time high at $2,236 in thinned trading amid the Easter Holiday. Most major world markets remain closed, although the United States published core PCE inflation, the Federal Reserve’s favorite inflation gauge.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.