Gold (XAU) Daily Forecast: Eyes on $2333 Pivot as Dollar Weakens

This decrease in the dollar’s strength helped curb the recent fall in gold prices, as gold and other metals are often priced in dollars.

However, the dollar maintained most of its gains from earlier in the month, reflecting market adjustments to diminished expectations for imminent Federal Reserve rate cuts.

Rate Outlook and Safe-Haven Demand

Initial safe-haven demand, spurred by geopolitical tensions between Iran and Israel, had previously propelled gold prices higher.

However, with tensions not escalating further, gold became more exposed to the pressures of potentially prolonged high interest rates.

High interest rates generally negatively impact gold as they raise the opportunity cost of holding non-yielding bullion.

Precious Metals and Economic Indicators

Other precious metals also saw some uplift against the backdrop of a weaker dollar, although they too were recovering from recent significant losses. For instance, platinum futures increased by 0.4% to $924.50 an ounce, and silver futures gained 0.5% to $27.485 an ounce.

The market’s attention is increasingly focused on forthcoming U.S. economic reports, which will provide further insights into interest rate trajectories.

Key data releases include the first-quarter Gross Domestic Product on Thursday and the Personal Consumption Expenditures Price Index, the Fed’s favored inflation measure, on Friday.

Recent data indicating persistent U.S. inflation has led to market adjustments, with fewer traders now anticipating a rate cut as early as June.

Upcoming Economic Events:

• 12:30 USD Core Durable Goods Orders m/m: Forecast 0.3%, Previous 0.3%
• 12:30 USD Durable Goods Orders m/m: Forecast 2.5%, Previous 1.3%

Gold Prices Forecast