- Gold price rebounds from $2,315 as US Dollar comes under pressure on Monday.
- Investors see the Fed reducing interest rates twice this year.
- The US economic outlook improved as preliminary PMI expanded at a faster pace in June.
Gold price (XAU/USD) attracts bids near $2,315 in Monday’s American session as the US Dollar (USD) corrects amid firm speculation that the Federal Reserve (Fed) will deliver two rate cuts this year. The US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, drops to 105.60. Expectations for the Fed to reduce interest rates twice in 2024 strengthened amid easing inflationary pressures in the United States (US).
The US Consumer Price Index (CPI) report showed that price pressures decelerated more than expected in May. Also, the preliminary S&P Global Purchasing Managers Indes (PMI) report for June showed signs of moderate cooling in cost growth. “Selling price inflation cooled to a five-month low in June. The rate of increase nevertheless fell to a five-month low in the services sector, where the rise was among the lowest seen over the past four years, and a six-month low in manufacturing,” the report said.
The CME FedWatch tool suggests that the central bank will start the policy-easing campaign at the September meeting and deliver subsequent rate cuts in November or December. The 30-day Federal Funds futures pricing data indicate that the probability of a rate cut in September is 66%.
In the early New York session, Chicago Fed Bank President Austan Goolsbee said a slowdown in inflation would open the door for policy-easing. Goolsbee said he is optimistic about further improvement in inflation data and hopes the Fed will gain more confidence in inflation heading back to 2%.
However, the Gold price could come under pressure as US bond yields have rebounded. Fed policymakers expect that interest rates will be cut only once this year, contrary to market expectations, according to the dot plot chart at the June FOMC economic projections. Officials want to see inflation declining for months before pivoting to the policy-normalization process. 10-year US Treasury yields bounced back to 4.27%. Higher yields on interest-bearing assets increase the opportunity cost of holding an investment in non-yielding assets, such as Gold.
Daily digest market movers: Gold price edges higher as US Dollar extends correction
- Gold’s price finds buying interest near $2,315 after a sharp decline on Friday. The precious metal faced an intense sell-off as the US Dollar (USD) rose after the preliminary S&P Global PMI report for June showed that economic activity unexpectedly expanded at a faster pace. The surprisingly upbeat US PMI report prompted an upside in the US Dollar, making Gold an expensive bet for currency holders.
- The report showed that the Composite PMI surprisingly jumped to 51.7. Investors expected the PMI data to decline to 51.0 from the prior release of 51.3. Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, commented, “The PMI is running at a level broadly consistent with the economy growing at an annualized rate of just under 2.5%. The upturn is broad-based, as rising demand continues to filter through the economy. Although led by the service sector, reflecting strong domestic spending, the expansion is being supported by an ongoing recovery in manufacturing, which so far this year is enjoying its best growth spell for two years.”
- This week, investors will keenly focus on the revised Q1 Gross Domestic Product (GDP) data and the core Personal Consumption Expenditure price index (PCE) for May. The core PCE price index data is the Fed’s preferred inflation measure, which will provide fresh cues on when and how much the central bank will reduce interest rates this year.
- On the global front, the security pact between Russian President Vladimir Putin and North Korean leader Kim Jong-un in Pyongyang has raised the risk of further escalating geopolitical tensions. In a wide-ranging treaty spanning political, trade, investment, and security cooperation, North Korea and Russia pledged to use all available means to provide immediate military assistance in the event the other is attacked, CNN reported. Mounting global tensions could limit the downside of the Gold price.
US Dollar Price Today:
US Dollar PRICE Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Swiss Franc.
USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
---|---|---|---|---|---|---|---|---|
USD | -0.36% | -0.15% | -0.16% | -0.13% | -0.13% | -0.12% | -0.06% | |
EUR | 0.36% | 0.23% | 0.27% | 0.29% | 0.25% | 0.30% | 0.39% | |
GBP | 0.15% | -0.23% | -0.02% | 0.05% | 0.02% | 0.07% | 0.12% | |
JPY | 0.16% | -0.27% | 0.02% | 0.05% | 0.08% | 0.09% | 0.09% | |
CAD | 0.13% | -0.29% | -0.05% | -0.05% | 0.00% | 0.01% | 0.07% | |
AUD | 0.13% | -0.25% | -0.02% | -0.08% | -0.01% | 0.04% | 0.10% | |
NZD | 0.12% | -0.30% | -0.07% | -0.09% | -0.01% | -0.04% | 0.05% | |
CHF | 0.06% | -0.39% | -0.12% | -0.09% | -0.07% | -0.10% | -0.05% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Technical Analysis: Gold price skates on thin ice above 50-day EMA
Gold price consolidates between $2,277-$2,450 for more than two months. The 50-day Exponential Moving Average (EMA) near $2,318 continues to provide support to the Gold price bulls. The 14-day Relative Strength Index (RSI) oscillates in the 40.00-60.00 range, indicating indecisiveness among market participants.
The precious metal could come under pressure if the Gold price breaks below the May 3 low around $2,277. A downside move could expose the March 21 high at $2,223. On the contrary, the Gold price could enter an unchartered trajectory if it breaks above the May 20 high of $2,450.
Economic Indicator
Core Personal Consumption Expenditures - Price Index (MoM)
The Core Personal Consumption Expenditures (PCE), released by the US Bureau of Economic Analysis on a monthly basis, measures the changes in the prices of goods and services purchased by consumers in the United States (US). The PCE Price Index is also the Federal Reserve’s (Fed) preferred gauge of inflation. The MoM figure compares the prices of goods in the reference month to the previous month.The core reading excludes the so-called more volatile food and energy components to give a more accurate measurement of price pressures. Generally, a high reading is bullish for the US Dollar (USD), while a low reading is bearish.
Read more.Next release: Fri Jun 28, 2024 12:30
Frequency: Monthly
Consensus: 0.1%
Previous: 0.2%
Source: US Bureau of Economic Analysis
After publishing the GDP report, the US Bureau of Economic Analysis releases the Personal Consumption Expenditures (PCE) Price Index data alongside the monthly changes in Personal Spending and Personal Income. FOMC policymakers use the annual Core PCE Price Index, which excludes volatile food and energy prices, as their primary gauge of inflation. A stronger-than-expected reading could help the USD outperform its rivals as it would hint at a possible hawkish shift in the Fed’s forward guidance and vice versa.
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

NZD/USD slides below 0.5500 for the first time since March 2020, ahead of RBNZ
NZD/USD has touched a fresh low since March 2020 this Wednesday and looks to extend the downward momentum below the 0.5500 mark ahead of the RBNZ's expected 25 bps interest rate cut decision. The global meltdown on the back of tariffs-led recession fears and escalating US-China trade war continue to weigh on the Kiwi.

AUD/USD slumps to fresh low since March 2020 amid worsening US-China trade relations
AUD/USD dropped to its lowest level since March 2020 after officials confirmed that the US will proceed with a sweeping 104% tariff on Chinese imports starting this Wednesday. Besides the escalating US-China trade war, global recession fears continue to rattle financial markets worldwide and drive flows away from the risk-sensitive Aussie.

Gold price extends its consolidative price move near multi-week low
Gold price remains confined in a range near a multi-week low touched on Monday amid mixed fundamental cues. The widening global trade war and recession fears lead to an extended sell-off in equity markets worldwide. Moreover, bets for more aggressive Fed rate cuts and a weaker USD act as a tailwind for the bullion.

RBNZ set for another interest rate cut amid trade tariff uncertainty
The Reserve Bank of New Zealand is on track to deliver a 25 basis point cut to the Official Cash Rate, bringing down the key policy rate from 3.75% to 3.50% following its April monetary policy meeting on Wednesday.

The Fed is looking at a hefty price level
We are still in thrall to tariffs, the faux-macro “data” driving markets. The WSJ editorial board advised other countries to take their tariffs to zero so that Trump’s “reciprocal” tariffs will have to be zero, too. Cute, but no cigar.

The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.