Gold price continues to attract buyers as it reaches $2,020 in the early European session. The increase in US inflation figures has led to speculation about a delay in the Fed’s move towards monetary policy easing. Additionally, rising geopolitical tensions in the Middle East and economic uncertainties have contributed to the upward trend of the yellow metal.
Despite the rebound of the US Dollar and higher bond yields, gold price has gained momentum for the fourth consecutive day in the early European session. Although trading activity was low on Monday due to the US market closure, investors are eagerly awaiting the FOMC Minutes on Wednesday to gain insights into the outlook for US interest rates. As of now, the gold price is trading at $2,020, with a 0.09% increase.
The US Dollar Index (DXY) has seen modest gains near 104.35, and the 10-year US Treasury yields have also edged higher to 4.30%. Stronger-than-expected US data has led investors to lower their rate cut expectations, providing support for the US Dollar.
On the other hand, global central banks are likely to diversify foreign reserves and accumulate gold as a hedge against ongoing geopolitical tensions in the Middle East and economic uncertainties. This surge in demand for gold as a safe-haven asset could further boost its price.
The upcoming release of the FOMC Meeting Minutes and the preliminary US S&P Global PMI for February could provide clearer insights into the future direction of the gold price. This week’s events will be closely monitored by investors for any potential impact on the market.
