Gold price continues to gain momentum, climbing near $2,060 despite a renewed demand for the US Dollar. The market is not expecting any rate hikes for the January meeting and is forecasting rate cuts for March and May 2024. Meanwhile, China’s average daily home sales during the New Year holiday dropped by 26% compared to last year. Market players will be closely monitoring the US ISM Manufacturing PMI and FOMC Minutes on Wednesday.
Despite the strength of the US Dollar, gold price is still on the rise. This is partly due to the potential rate cuts from the Federal Reserve, which could cap the Greenback’s upside and lift the USD-denominated commodities. The market has already priced in no hike for the January meeting and is forecasting rate cuts for March and May 2024.
Additionally, China’s efforts to address real estate risks and support steady and healthy market growth may positively impact the gold market, as China is one of the world’s largest gold consumers.
Looking ahead, the final US ISM Manufacturing PMI report and the Fed’s Meeting Minutes are due on Wednesday, with attention shifting to the US labor data on Friday. Traders will be closely watching these figures for trading opportunities around the gold price.
Insight:
Despite the USD’s renewed demand and the decrease in China’s daily home sales, the gold market is showing resilience and continuous momentum. The potential impact of the Federal Reserve’s rate cuts and China’s economic developments are important factors driving gold price movement. Furthermore, the upcoming US economic data will play a crucial role in shaping trading opportunities for the yellow metal.
