Gold declines as US-China trade optimism offsets Fed rate cut bets
Gold (XAU/USD) attracts fresh sellers following an intraday uptick to levels above the $4,100 round figure and turns lower for the second straight day on Monday.
The commodity sticks to the negative bias through the first half of the European session, though it lacks bearish conviction amid a mixed fundamental backdrop. Signs of easing trade tensions between the US and China boosted investors' appetite for riskier assets, which, in turn, undermines demand for the safe-haven precious metal. However, dovish Federal Reserve (Fed) expectations act as a tailwind for the non-yielding yellow metal.
Traders now seem convinced that the US central bank will lower borrowing costs two more times by the year-end, and the bets were reaffirmed by softer US consumer inflation figures released on Friday.
This, in turn, keeps the US Dollar (USD) bulls on the defensive, which, along with persistent geopolitical risks stemming from the protracted Russia-Ukraine war, offers some support to the Gold. This, in turn, warrants some caution for the XAU/USD bears and positioning for deeper losses as the market focus remains glued to the highly-anticipated two-day FOMC meeting starting on Tuesday.
Source: FXstreet.com
