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Gold ($XAU) Commodity Forecast: Down 0.8% Today

Morpher AI identified a bearish signal. The commodity price may continue to fall based on the momentum of the negative news.

What is Gold?

Gold is a precious metal often seen as a safe-haven asset during times of economic uncertainty. Today, the market experienced a strong bearish movement, with Gold prices declining.

Why is Gold going down?

XAU commodity is down 0.8% on Jun 21, 2024 14:06

  • Gold prices fell today despite recent upward momentum, as investors awaited further cues on the Federal Reserve's monetary policy outlook.
  • The anticipation of a potential interest rate cut by the Fed was reinforced by soft US economic data, including weak retail sales and a slowdown in the labor market.
  • Higher US Treasury yields and tepid gold demand in key markets like India and China also contributed to the downward pressure on Gold prices.
  • The market movement suggests that investors are closely monitoring economic indicators and Fed officials' statements to assess the timing and extent of potential rate cuts, impacting the demand for safe-haven assets like Gold.

XAU Price Chart

XAU News

Gold Set for 2nd Weekly Gain

Gold held steady around $2,360 per ounce on Friday, hovering at its highest level in two weeks, and set to post its second weekly gain, as soft US economic data reinforced anticipations that the Federal Reserve might lower interest rates this year. Last week's data revealed a slowdown in the labor market and price pressures, followed by weak retail sales data on Tuesday, indicating that US economic activity remained sluggish in the second quarter. Additionally, initial claims for unemployment benefits decreased slightly last week, while new housing construction in May fell to its lowest level in nearly four years. Investors’ focus now turned to the flash purchasing managers' indexes due later in the day, which could provide further insight into the economy's strength.

Gold Hovers Around $2,330

Gold hovered around $2,330 per ounce mark on Thursday, as sluggish US economic performance heightened expectations that the Federal Reserve might reduce interest rates this year. Tuesday’s data showed that US retail sales barely rose, signaling cooling consumer sentiment. This, along with recent labor market and price data suggesting easing pressures, prompted the Fed to seek further confirmation of cooling inflation before likely cutting interest rates by year's end. Meanwhile, Chicago Fed Bank President Austan Goolsbee called the latest consumer price inflation reading "excellent" on Tuesday and expressed optimism for further inflation cooling this year. Investors are now focused on weekly jobless claims due later in the day and flash purchasing managers' indexes on Friday for insights into consumption and economic strength.

Gold Rises as Investors Await Further Signals

Gold rose to around the $2,320 per ounce mark on Monday, rebounding from declines in the previous session, as investors awaited a series of economic reports and comments from Federal Reserve officials throughout the week to gauge the Fed’s interest rate cut timeline. Key focal points include the US retail sales data scheduled for later today, weekly jobless claims on Thursday, and Friday's flash purchasing managers' indices, all of which offer insights into consumer spending and economic strength. Meanwhile, Philadelphia Fed President Patrick Harker stated on Monday that the Fed could potentially cut its benchmark rate once this year, contingent on his economic forecast. Traders are now closely monitoring upcoming remarks from several Fed officials, including New York Fed President John Williams and Richmond Fed President Tom Barkin.

Gold Falls as Investors Await More Cues

Gold dropped to around $2,320 per ounce on Monday, following a more than 1% rise last week, pressured by higher US Treasury yields, while investors awaited further cues to gauge the Federal Reserve's monetary policy outlook. Traders will closely monitor Fed officials' statements, as well as key economic releases such as retail sales, industrial production, and S&P Global flash PMIs scheduled for this week, to assess its impact on the Fed's timing and the potential for multiple rate cuts this year. This comes in light of recent cooling US inflation data, despite the Fed signaling just one cut in its updated economic projections. Elsewhere, gold demand in India was tepid last week, while premiums in top consumer China slid due to weak sentiment and high spot prices.

Gold Price History

21.05.2024 - XAU Commodity was down 0.8%

  • Gold prices fell today despite recent upward momentum, as investors awaited further cues on the Federal Reserve's monetary policy outlook.
  • The anticipation of a potential interest rate cut by the Fed was reinforced by soft US economic data, including weak retail sales and a slowdown in the labor market.
  • Higher US Treasury yields and tepid gold demand in key markets like India and China also contributed to the downward pressure on Gold prices.
  • The market movement suggests that investors are closely monitoring economic indicators and Fed officials' statements to assess the timing and extent of potential rate cuts, impacting the demand for safe-haven assets like Gold.

20.02.2024 - XAU Commodity was up 1.1%

  • Gold prices surged as investors awaited the US Federal Reserve's policy decision, with expectations of interest rates remaining unchanged leading to increased confidence in the precious metal.
  • Strong US inflation data and the anticipation of monetary easing in the future contributed to the bullish movement in gold prices.
  • The Bank of Japan's decision to end its negative rate policy and the Reserve Bank of Australia's steady rates also played a role in boosting gold prices as investors sought safe haven assets amidst global economic uncertainties.
  • Overall, the bullish movement in gold can be attributed to a combination of factors including central bank policies, economic data releases, and geopolitical tensions, all of which favored the appeal of the precious metal as a store of value.

01.02.2024 - XAU Commodity was up 0.8%

  • Gold surged to a 4-week high of $2051.00 USD/t.oz, benefiting from the latest US inflation data that reinforced expectations of Federal Reserve interest rate cuts.
  • The solidification of investors' beliefs in the Fed's accommodative stance, particularly after the PCE data release, bolstered Gold's appeal as a hedge against economic uncertainties.
  • With markets pricing in a high probability of a Fed rate cut in June and no hikes expected in the near term, the outlook for Gold remains positive as investors seek refuge in the precious metal.
  • Lower yields and the prospect of monetary easing further supported Gold's upward trajectory, making it an attractive asset in the current economic landscape.

29.01.2024 - XAU Commodity was up 0.5%

  • Gold prices rose as investors anticipated the release of the US PCE inflation report, which could impact Federal Reserve interest rate decisions and consequently elevate gold's attractiveness as an inflation hedge.
  • Factors such as lower yields and expectations of monetary stimulus also contributed to the positive trend in gold prices, especially amidst uncertainties regarding the timing and scale of rate adjustments by the Fed.
  • Geopolitical tensions in the Middle East escalated safe-haven demand for gold as Houthi militants took credit for attacks on commercial ships, bolstering the metal's upward movement.
  • Despite some periods of subdued trading, overall market sentiment regarding gold remained optimistic, steered by a mix of economic reports, central bank communications, and global uncertainties that collectively influenced today's bullish market performance.

13.01.2024 - XAU Commodity was down 0.4%

  • The downward movement in the gold market today can be attributed to the following factors:
  • 1. US Inflation Test: Concerns arose among investors ahead of a significant US inflation reading that may affect interest rate expectations. Positive US jobs data and statements from Federal Reserve officials raised fears of potential rate cut delays, leading to a decline in gold prices.
  • 2. Strong Dollar and Treasury Yields: Gold faced pressure from a strong dollar and increasing Treasury yields, reducing its appeal as an alternative investment. Positive US jobs data and comments from Fed officials dampened expectations of rate cuts, further impacting gold sentiment.
  • 3. Geopolitical Developments: Investors closely monitored geopolitical tensions in the Middle East, particularly tensions between Israel and Hamas. While gold typically benefits from safe-haven demand, these factors failed to uplift the metal amidst other bearish influences.
  • 4. Reassessing Monetary Policy Prospects: Economic data and remarks from central bankers, including officials from the European Central Bank (ECB), prompted investors to reevaluate their expectations for monetary policy. A gradual decrease in price pressures and cautious statements from Fed officials diminished expectations of rate cuts, thus affecting gold prices.
  • Overall, the downward movement in the gold market today can be attributed to concerns about interest rates, a strong dollar, geopolitical tensions, and the reassessment of monetary policy prospects.
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Disclaimer
Morpher is not liable for the content of the AI investment insights. Like most GPT-powered tools, these summaries may contain AI hallucinations and inaccurate information. Morpher is not presenting you with any investment advice. All investments involve risk, and the past performance of a security, industry, sector, market, or financial product does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on an evaluation of their financial circumstances, investment objectives, risk tolerance, and liquidity needs. These summaries do not constitute investment advice.