Gold rebounds to near upper end of daily range due to safe-haven demand
Gold price (XAU/USD) holds gains after experiencing volatility, trading near the upper end of its daily range around the $3,250 region during the European hours on Monday. The precious metal receives support as a surprise downgrade of the US government's credit rating increased demand for safe-haven assets amid rising concerns over the US economic outlook and fiscal health.
Hoewever, the optimism over the US-China trade truce for 90 days and hopes for more US trade deals with other countries cap the upside for the safe-haven commodity, though a combination of factors could limit losses.
US Treasury Secretary Scott Bessent's reaffirmation of President Donald Trump's tariff threats, along with persistent geopolitical risks, is seen as acting as a tailwind for the safe-haven Gold price. Moreover, bets that the Federal Reserve (Fed) will cut interest rates further in 2025 keep the US Dollar (USD) depressed and lend some support to the non-yielding yellow metal.
This, in turn, makes it prudent to wait for strong follow-through selling before positioning for the resumption of the recent retracement slide from the $3,500 psychological mark, or the all-time peak touched in April.
Source: FXstreet