Gold price advances to one-week top, beyond $3,350 level amid weaker risk tone, notable USD weakness
- Gold price attract fresh buyers on Monday amid modest USD weakness.
- US fiscal concerns and Fed rate cut bets keep the USD bulls on the defensive.
- Trade uncertainties and geopolitical risks further benefit the XAU/USD pair.
Gold price (XAU/USD) climbs to a one-week high, beyond the $3,350 level during the early European session on Monday and seems poised to climb further amid a combination of supporting factors. The Personal Consumption Expenditures (PCE) Price Index released on Friday further pointed to signs easing inflationary pressures in the US and bolstered the case for more rate cuts by the Federal Reserve (Fed). This, in turn, prompts fresh US Dollar (USD) selling and acts as a tailwind for the non-yielding yellow metal.
Meanwhile, concerns about the worsening US fiscal situation, geopolitical risks stemming from the protracted Russia-Ukraine war and conflicts in the Middle East, and renewed US-China trade tensions temper investors’ appetite for riskier assets. This is evident from a generally weaker tone around the equity markets and turns out to be another factor that benefits the safe-haven Gold price. Moreover, a move beyond the $3,325-3,326 hurdle favors the XAU/USD bulls and supports prospects for further gains.
Daily Digest Market Movers: Gold price continues to scale higher amid a weaker USD, reviving safe-haven demand
- The US Bureau of Economic Analysis reported on Friday that the Personal Consumption Expenditures (PCE) Price Index cooled to the 2.1% YoY rate in April, or the lowest since February 2021. Meanwhile, the core PCE Price Index, which excludes volatile food and energy prices, came in at 2.5%, down from the 2.7% increase registered in March.
- Traders continued to bet that the Federal Reserve will lower borrowing costs in September and are pricing in the possibility of another rate cut in December. Fed Governor Christopher Waller said on Monday that rate cuts remain possible later this year even with the Trump administration’s tariffs likely to push up price pressures temporarily.
- Investors now await speeches from several FOMC members this week, including Fed Chair Jerome Powell’s appearance later this Monday, for cues on the monetary policy outlook. This will play a key role in influencing the near-term US Dollar price dynamics and determining the next leg of a directional move for the non-yielding Gold price.
- Ukraine ramped up the war with one of the biggest drones attracted to Russia ahead of the second round of direct peace talks in Istanbul later today. Ukraine conducted major drone strikes against Russian military airfields across five regions on Sunday and hit over 40 Russian military aircraft, which included nuclear-capable long-range bombers.
- Israel strongly denied its involvement in the deadly incident that claimed at least 30 Palestinian lives and accused Hamas of firing on hungry civilians gathered to receive humanitarian aid in southern Gaza. This comes amid a flurry of conflicting reports and keeps geopolitical risks in play, further lending support to the safe-haven XAU/USD.
- Traders now look forward to important US macro releases scheduled at the beginning of a new month, starting with the ISM Manufacturing PMI on Monday. Apart from this, Fed Chair Jerome Powell’s speech might influence the USD price dynamics and contribute to producing short-term trading opportunities around the commodity.
Gold price could accelerate the intraday move higher once the $3,326-3,328 immediate hurdle is cleared
From a technical perspective, a sustained strength beyond the $3,326-3,328 supply zone could be seen as a fresh trigger for the XAU/USD bulls against the backdrop of last week’s bounce from the 200-period Exponential Moving Average (EMA) pivotal support on the 4-hour chart, The subsequent move up beyond the $3,345-3,350 intermediate resistance might now allow the Gold price to reclaim the $3,400 mark. The momentum could extend further towards the next relevant barrier near the $3,432-3,434 region.
On the flip side, weakness below the $3,300 round figure could find some support near the $3,280-3,278 zone. Any further slide could be seen as a buying opportunity and remain limited near the $3,258-3,257 region. The latter represents the 200-period EMA on the 4-hour chart, which if broken decisively could make the Gold price vulnerable to accelerate the fall further towards the $3,200 mark.
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 Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.57% | -0.59% | -0.54% | -0.37% | -0.67% | -0.86% | -0.50% | |
| EUR | 0.57% | -0.02% | 0.03% | 0.19% | -0.10% | -0.32% | 0.07% | |
| GBP | 0.59% | 0.02% | 0.10% | 0.22% | -0.07% | -0.29% | 0.09% | |
| JPY | 0.54% | -0.03% | -0.10% | 0.16% | -0.15% | -0.35% | -0.06% | |
| CAD | 0.37% | -0.19% | -0.22% | -0.16% | -0.30% | -0.51% | -0.13% | |
| AUD | 0.67% | 0.10% | 0.07% | 0.15% | 0.30% | -0.16% | 0.24% | |
| NZD | 0.86% | 0.32% | 0.29% | 0.35% | 0.51% | 0.16% | 0.39% | |
| CHF | 0.50% | -0.07% | -0.09% | 0.06% | 0.13% | -0.24% | -0.39% |
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).
