Gold Price Forecast: XAU/USD edges lower below $2,400, PBoC refrains from gold purchases for second month

Gold price edges lower to $2,385 in Monday’s early Asian session.
US Nonfarm Payrolls increased by 206K in June versus 218K prior, above the expectation of 190K.
The Chinese central bank refrained from gold purchases for a second month, dragging the yellow metal price lower.

Lallalit Srijandorn FXStreet

Gold price (XAU/USD) attracts some sellers near $2,385, snapping the three-day winning streak during the early Asian trading hours on Monday. The downtick of the yellow metal is backed by the modest rebound of the Greenback and the Chinese central bank paused Gold buying for the second month. However, the safe-haven flows amid the political uncertainty might lift the precious metal.

US Nonfarm Payrolls (NFP) employment increased by 206K in June, above the expectation of 190K. The growth was lower than the previous reading of 218K, according to the US Bureau of Labour Statistics (BLS) on Friday. Meanwhile, the Unemployment rate ticked up from 4.0% in May to 4.1% in June. Finally, Average hourly earnings rose 0.3% MoM in June, matching expectations.

The market is currently pricing in a 77% odds of a September rate cut by the US Federal Reserve (Fed), up from 70% last Friday, according to the CME FedWatch tool. Furthermore, the FOMC minutes showed that policymakers acknowledged that price pressures were easing, triggering the expectation of Fed rate cuts this year, which might drag the Greenback lower and lift the USD-denominated Gold.

Additionally, the political uncertainty in Europe, particularly in France, and geopolitical tensions in the Middle East might boost the safe-haven flows, benefiting precious metals. According to the Economist, exit polls suggested that the left-wing New Popular Front (NFP) seems to be on track to win the most seats in the second voting round of French parliamentary elections on Sunday. Investors are concerned about uncertainty as the final round of the French parliamentary elections pointed to a hung parliament.

Elsewhere, data from China over the weekend showed that the People's Bank of China (PBoC) refrained from gold purchases for a second month. "It appears that gold prices remain a little too high and the PBOC is waiting for a further pullback before resuming its gold purchasing programme," said Nitesh Shah, a commodity strategist at WisdomTree. It’s worth noting that China is the world’s biggest billion consumer and the pause in gold buying could weigh on the Gold price.

Gold FAQs

Why do people invest in Gold?

Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

Who buys the most Gold?

Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

How is Gold correlated with other assets?

Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

What does the price of Gold depend on?

The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.

Author

Lallalit Srijandorn

FXStreet

Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.

AUD/USD eyes 0.7150 barrier nine-day EMA

AUD/USD inches higher after registering modest losses in the previous day, trading around 0.7130 during the Asian hours. The technical analysis of the daily chart indicates that the pair is moving sideways within the rectangle pattern, suggesting a consolidation as neither the bulls nor the bears have enough momentum to take control of the market.

USD/JPY trades below 160.00 intervention threshold; bullish bias intact

The USD/JPY pair attracts some sellers during the Asian session amid fears that authorities will step in again to prop up the Japanese Yen. Furthermore, the Israel-Lebanon truce prompts some profit-taking around the US Dollar and exerts downward pressure on the currency pair.

Gold meets contention near $4,420…for now

Gold extends its recovery past the $4,500 mark per troy ounce on Thursday. The yellow metal’s advance comes amid the resurgence of some selling interest around the, improving risk sentiment, and declining US Treasury yields across the curve.

Bitcoin’s massive storm is back: Why the sell-off is far from over

Bitcoin price action over the last few weeks has felt less like a normal, healthy correction and more like a slow grinding crash that continues to wreak havoc on holdings and trading accounts. And everything suggests that the dramatic crash isn’t over.

Nonfarm payrolls: Testing the limits of Fed policy patience

The upcoming nonfarm payrolls report for May will provide the final update on the US labor market before Kevin Warsh attends his first policy meeting as the new Fed Chair later this month.

Recession on paper: What really moves the Canadian Loonie now?

Statistics Canada handed the headline writers a gift and the analysts a headache. Real GDP shrank 0.1% on an annualized basis in the first quarter, and with the fourth quarter of 2025 revised down to a 1.0% contraction, that is two negative quarters in a row, the textbook definition of a technical recession and Canada's first since the pandemic.