Gold price Trades With Mild Negative Bias; Holds Above $2,900 Ahead of FOMC Minutes
Gold price (XAU/USD) retreats from the vicinity of the all-time peak, though it manages to hold comfortably above the $2,900 mark through the Asian session on Wednesday. A generally positive risk tone prompts some profit-taking around the safe-haven precious metal amid some repositioning trade ahead of the FOMC meeting minutes. Investors will look for fresh cues about the Federal Reserve's (Fed) rate-cut path, which, in turn, will drive the US Dollar (USD) and provide a fresh impetus to the non-yielding yellow metal.
In the meantime, the growing acceptance that the Fed will cut interest rates further keeps the USD bulls on the defensive and acts as a tailwind for the Gold price. Apart from this, the uncertainty surrounding US President Donald Trump's tariff plans, which could trigger a global trade war, might further contribute to limiting any meaningful corrective decline for the bullion. Hence, it will be prudent to wait for strong follow-through selling before confirming that the XAU/USD pair has topped out and placing aggressive bearish bets.
The optimism over a delay in the implementation of US President Donald Trump's reciprocal tariffs and talks aimed at ending the protracted Russia-Ukraine war prompted some profit-taking around the Gold price on Wednesday.
Investors remain worried about a potential escalation in global trade tensions on the back of Trump's protectionist policies. This, along with bets for further policy easing by the Federal Reserve, supports the safe-haven bullion.
The disappointing release of US Retail Sales figures on Friday, along with mixed signals on inflation, suggests that the US central bank could possibly cut interest rates at the September or October monetary policy meeting.
In fact, the Fed Funds Futures see the possibility of a 40 basis point rate cut by the end of this year. This keeps a lid on the US Dollar (USD) recovery from a two-month low and should further underpin the XAU/USD.
Source : FXStreet
