By Konstantinos Chrysikos, Head of Customer Relationship Management at Kudotrade
Gold traded slightly lower on Tuesday, hovering near the USD 4,000 per ounce mark, as easing trade risks and a resilient dollar curbed demand for the safe-haven asset. The recent thaw in US-China trade tensions eased market concerns and triggered a rotation away from defensive assets.
At the same time, the dollar held near three-month highs as investors reassessed the likelihood of another Federal Reserve rate cut in December. Chair Jerome Powell’s cautious comments last week reinforced expectations that further easing may not be guaranteed, which could weigh on non-yielding assets like the precious metal.
Investors now turn their attention to this week’s US private payroll data for further clues on the Fed’s policy path. Signs of weak labour conditions could raise expectations of a dovish monetary policy and boost gold prices.
Beyond the macro-outlook, persistent geopolitical instability continues to offer a safety cushion for gold. Tensions intensified in eastern Ukraine, while renewed Israeli strikes across Gaza underscored the fragile scenario in the Middle East.