Authorized and Regulated Entities: SARACEN MARKETS (PTY) LTD

US Dollar Weakness Lends Support to Gold Amid Market Uncertainties

3 weeks ago

Renewed selling pressure on the US Dollar is providing a reprieve for Gold prices, halting its recent downtrend. This trend is further bolstered by a broader risk-off sentiment in the market ahead of key events, including Friday’s US PCE inflation data and Sunday’s French election, which could limit the downside for Gold.

Investors are now closely watching the final revision of the US first-quarter GDP, Pending Home Sales, and Durable Goods Orders data for new insights into the economy’s health today. These indicators could provide fresh cues regarding the timing of the US Federal Reserve’s (Fed) first interest rate cut this year.

Recent data revealed that sales of new US single-family homes dropped to a six-month low in May, attributed to a surge in mortgage rates, which dampened demand. Despite this, the US Dollar remained resilient as US Treasury bond yields benefited from the recent hawkish remarks by Fed officials.

Currently, markets are pricing in approximately a 62% probability of a Fed rate cut in September, slightly down from 68% earlier in the week. This evolving expectation reflects ongoing market uncertainty and the delicate balance the Fed must maintain in its policy decisions.

For a comprehensive understanding of the market’s outlook as provided by our esteemed analysts, we kindly invite you to signup as SaracenMarkets clients, here.