Gold Prices Dip on Stronger US Dollar
Gold prices, denoted as XAU/USD, have halted their three-day winning streak as the US Dollar (USD) modestly rebounds. The recent uptick in the USD comes in response to hawkish remarks from several Federal Reserve (Fed) officials, coupled with stronger-than-expected US economic data.
Fed Rate Cut Expectations Dampened:
The hawkish comments from Fed officials have tempered expectations of a rate cut in September, exerting upward pressure on the USD. Consequently, gold prices, which denominate in dollars, have faced downward pressure.
Geopolitical Tensions Offset USD Strength:
Despite the USD's strength, ongoing geopolitical tensions and uncertainties continue to underpin gold's appeal as a safe-haven asset. Investors traditionally turn to gold during times of geopolitical instability, providing support for its price.
Central Banks' Demand to Bolster Gold Prices:
Moreover, increasing demand from the central bank is expected to bolster gold prices in the near term. Central banks around the world have been ramping up their gold purchases, further reinforcing gold's status as a store of value.
