Gold prices edged lower in early Wednesday trading, erasing the previous session's gains but remaining comfortably above the $3,200 mark. The continued de-escalation of the US-China trade conflict is fuelling optimism among investors, boosting risk appetite and reducing demand for haven assets such as gold. Meanwhile, the US dollar weakened against other major currencies following Tuesday's release of slightly lower-than-expected inflation data. Market expectations for the Federal Reserve's interest rate trajectory remain unchanged, with consensus still pointing to two rate cuts before the end of the year. The first cut is widely anticipated after the summer. On the geopolitical front, hopes are rising that direct talks between Russia and Ukraine could pave the way for a ceasefire. However, tensions in the Middle East remain elevated. In this context, gold faces headwinds due to improving sentiment across risk assets. Nevertheless, strong support above the $3,200 level is expected to persist as uncertainty continues to dominate both trade negotiations and geopolitical developments.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
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