Gold retreats to the lower end of its daily range, holds above $4,200 amid mixed cues
- Gold attracts fresh sellers following an intraday uptick amid receding safe-haven demand.
- Rising Fed rate cut bets keep the USD depressed and offer support to the XAU/USD pair.
- Geopolitical risk should contribute to limiting losses for the safe-haven precious metal.
Gold (XAU/USD) struggles to capitalize on a modest intraday move up and retreats to the lower end of its daily range heading into the European session on Wednesday. A generally positive tone around the equity markets is seen as a key factor acting as a headwind for the safe-haven precious metal. Furthermore, bulls opt to wait for important US macro releases for more cues about the Federal Reserve’s (Fed) rate-cut path and placing fresh bets around the non-yielding yellow metal.
In the meantime, the growing acceptance that the US central bank will lower borrowing costs next week continues to exert downward pressure on the US Dollar (USD) and offer some support to the Gold price. Apart from this, geopolitical uncertainties stemming from the protracted Russia-Ukraine war and the risk of a further escalation of conflict contribute to limiting the downside for the safe-haven precious metal. This, in turn, warrants some caution for the XAU/USD bears.
Daily Digest Market Movers: Gold bulls seem hesitant as positive risk tone undermine safe-haven demand
- Recent US macro data pointed to a gradual cooling of the US economy. Moreover, dovish signals from Federal Reserve officials bolstered expectations for a 25-basis-point rate cut at the upcoming FOMC meeting next week.
- According to the CME Group’s FedWatch Tool, traders are pricing in a nearly 90% probability of the move, which keeps the US Dollar depressed through the Asian session on Wednesday and supports the non-yielding Gold.
- Reports suggest that White House National Economic Council Director Kevin Hassett is seen as the frontrunner to become the next Fed Chair. Hassett is expected to enact US President Donald Trump’s calls for lower rates.
- Russian President Vladimir Putin and Trump’s envoys Steve Witkoff failed to reach a compromise on a possible peace deal in Ukraine. Adding to this, Putin issued threats that Russia was ready for a war with Europe.
- This keeps geopolitical risks in play and turns out to be another factor acting as a tailwind for the safe-haven precious metal. The XAU/USD bulls, however, might opt to wait for US macro data before placing fresh bets.
- The US ADP report on private-sector employment and the US ISM Services PMI will be published later today. The focus, however, will remain glued to the Personal Consumption Expenditure (PCE) Price Index on Friday.
- The latter would provide more cues about the Fed’s rate-cut path, which, in turn, will play a key role in influencing the near-term USD price dynamics and determining the next leg of a directional move for the commodity.
Gold constructive setup suggests that weakness below $4,200 could be bought into
The overnight goodish rebound from the vicinity of the $4,155-4,150 support and the subsequent move up favor the XAU/USD bulls. However, it will still be prudent to wait for acceptance above the $4,245-4,250 strong barrier before positioning for any further appreciating move. The commodity might then surpass the weekly swing high, around the $4,264-4,265 region and the $4,277-4,278 resistance, toward reclaiming the $4,300 round figure.
On the flip side, weakness below the $4,200 mark might continue to attract buyers and find decent support ahead of the $4,150 level. The latter should act as a key pivotal point, which, if broken, could drag the Gold price to the $4,100 mark en route to the $4,075-4,073 confluence support – comprising the 200-period Exponential Moving Average (EMA) on the 4-hour chart and an ascending trend-line extending from late October.
US Dollar Price Last 7 Days
The table below shows the percentage change of US Dollar (USD) against listed major currencies last 7 days. US Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.68% | -0.59% | -0.34% | -0.93% | -1.76% | -2.30% | -0.71% | |
| EUR | 0.68% | 0.09% | 0.33% | -0.25% | -1.08% | -1.62% | -0.03% | |
| GBP | 0.59% | -0.09% | 0.27% | -0.35% | -1.18% | -1.70% | -0.12% | |
| JPY | 0.34% | -0.33% | -0.27% | -0.59% | -1.42% | -1.96% | -0.37% | |
| CAD | 0.93% | 0.25% | 0.35% | 0.59% | -0.83% | -1.37% | 0.22% | |
| AUD | 1.76% | 1.08% | 1.18% | 1.42% | 0.83% | -0.54% | 1.06% | |
| NZD | 2.30% | 1.62% | 1.70% | 1.96% | 1.37% | 0.54% | 1.62% | |
| CHF | 0.71% | 0.03% | 0.12% | 0.37% | -0.22% | -1.06% | -1.62% |
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).
