Gold continued to trade sideways after pulling back on Monday before due to profit-taking by market participants and following the People’s Bank of China’s (PBoC) decision not to purchase gold for the second consecutive month in June.
Investors could react to Federal Reserve Chair Jerome Powell’s testimony before Congress and the release of June’s inflation data, which will offer insights into the potential direction of the US central bank’s upcoming policy decisions.
Following recent weak economic indicators, market expectations are heightened for two rate cuts by the end of the year, starting in September. A dovish stance from Powell in response to last week’s disappointing economic data could further give a boost to gold prices.
Geopolitical risks and political uncertainties remain key factors contributing to the gold price strength. Thus, amid ongoing political uncertainties in France and persistent geopolitical tensions in the Middle East, the mood remains cautious. These factors could drive market interest towards the yellow metal, traditionally seen as a safe-haven asset.
