"The precious metal has managed to regain some positive momentum after a period of decline, benefiting from the slight weakness in the U.S. dollar and renewed demand for safe-haven assets. However, the picture is far from one-sided; behind the scenes lies a mix of conflicting factors that make forecasting gold's future path a delicate task-one that requires a careful reading of monetary, political, and economic developments altogether."
"Although the Fed recently cut interest rates by 25 basis points, Chair Jerome Powell's statements effectively curbed market expectations for further rate cuts in the near term, which has dampened investor appetite for non-yielding assets such as gold. Consequently, any attempts by gold to break above current resistance levels may face strong headwinds as long as U.S. monetary policy remains relatively tight."
"At the same time, renewed global economic concerns are providing gold with some psychological support, especially amid lingering uncertainty surrounding global trade prospects between the United States and China. Despite the cautious optimism expressed by U.S. President Donald Trump regarding the outcome of discussions with his Chinese counterpart Xi Jinping, markets have yet to translate that into full confidence. Past experiences have taught investors that "trade optimism" often fades at the first sign of a negotiating obstacle or a hawkish statement."
Gold regained positive momentum after prior declines, helped by a slightly weaker U.S. dollar and renewed safe-haven demand. The rally appears to be more of a technical correction supported by psychological factors rather than the start of a sustained bullish trend. The Federal Reserve recently cut rates by 25 basis points, but Chair Jerome Powell's remarks reduced expectations for additional near-term easing, which dampens demand for non-yielding assets. Attempts to breach resistance levels could face strong headwinds while U.S. monetary policy remains relatively tight. Renewed global economic concerns and unresolved U.S.-China trade uncertainty continue to provide some support for gold's appeal.
Read at London Business News | Londonlovesbusiness.com
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