Gold prices edged higher in early Tuesday trading, reclaiming its position above the $2,900 level. Demand for the haven precious metal is rising as risk appetite wanes in the financial markets, highlighted by yesterday’s session, which saw stock indices across the board suffer sizeable losses. Investor concerns are mounting over the US administration’s erratic policies—both in trade and in handling long-standing geopolitical alliances. The potential fallout includes a US recession, a global wave of protectionism, and heightened geopolitical instability. Against this backdrop, expectations of a more dovish Federal Reserve are growing, weighing on the dollar. At the same time, recession fears are driving demand for US Treasuries, pushing yields lower and further enhancing the appeal of the non-yielding precious metal. Traders will also be closely watching today’s release of US job openings data and tomorrow’s CPI figures, looking for further signs of economic slowdown and inflationary risks—both of which could influence the Fed’s monetary policy outlook and, consequently, the price of gold.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
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