Summary:
- Gold price trades softer around $2,325 in Monday’s early Asian session.
- The US PCE price index was not sufficient to prompt the Federal Reserve (Fed) rate cut, weighing on the yellow metal.
- Israeli Prime Minister begrudgingly accepted the US President’s plan for a ceasefire in Gaza on Sunday.
- Geopolitical risks in the Middle East may provide some support to gold as a safe-haven asset.
- Delayed expectations of a Federal Reserve rate cut impact gold prices.
Gold price trades softer around $2,325 in Monday’s early Asian session. The US PCE price index was not sufficient to prompt the Federal Reserve (Fed) rate cut, weighing on the yellow metal. Israeli Prime Minister begrudgingly accepted the US President’s plan for a ceasefire in Gaza on Sunday.
During the early Asian trading hours on Monday, the gold price (XAU/USD) edged lower to $2,325. The precious metal trimmed gains after the US PCE data for April indicated that price pressures had cooled. However, ongoing geopolitical risks in the Middle East may provide some support to gold, a traditional safe-haven asset.
The recent US PCE inflation report was insufficient to trigger a Federal Reserve rate cut, suggesting the central bank might need more time to achieve its inflation goals. Initially, investors anticipated a rate cut in March, but this expectation has been pushed to September. This delay weighs on gold prices, as the opportunity cost of holding non-yielding assets increases.
The US PCE price index rose 0.3% month-over-month in April, while the annual PCE figure increased by 2.7% year-over-year, both in line with expectations. The Core PCE, excluding volatile food and energy prices, advanced 0.2% month-over-month in April compared to a 0.3% gain in March. Annually, the core PCE price index climbed 2.8% for the third consecutive month.
On Sunday, Israeli Prime Minister Benjamin Netanyahu’s administration reluctantly agreed to President Biden’s proposal for a Gaza ceasefire. Negotiations continue amid ongoing conflict, with intense Israeli airstrikes over the weekend. Investors will closely monitor developments in geopolitical tensions, as escalating risks could boost safe-haven flows and benefit gold prices.
For the latest updates and expert analyses, visit TopFxIntro.com, your go-to source for comprehensive forex news.