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- XAU\/USD falls over 1.5% as safe-haven demand wanes on global trade and geopolitical easing.<\/strong><\/b><\/li>\n
- US-China trade deal signed; more agreements expected before July 9, boosting sentiment.<\/strong><\/b><\/li>\n
- Iran signals diplomacy; Israel\u2013Gaza war may end in two weeks, says Al Arabiya.<\/strong><\/b><\/li>\n
- Core PCE rose above forecasts; Fed\u2019s Kashkari still expects two rate cuts in 2025.<\/strong><\/b><\/li>\n<\/ul>\n
Gold<\/span><\/a> price tumbled over 1.50% on Friday amid an improvement in risk appetite, driven by several factors. The de-escalation of the Israel\u2013Iran conflict, the trade agreement with China, and ongoing negotiations between the <\/span>United States<\/span><\/a> (US) and its peers to reach commercial deals were welcomed by investors, who had previously sought refuge in Bullion\u2019s safe-haven demand.<\/span><\/p>\n
The XAU\/USD trades at $3,274 after hitting a daily high of $3,328. On Thursday, the White House announced that the US and China have formally signed a trade agreement, effectively ending the ongoing \u201ctrade war.\u201d US Commerce Secretary, Howard Lutnick, said that additional deals are looming as the July 9 deadline approaches.<\/span><\/p>\n
Regarding geopolitics, Iran has shown signs of flexibility, leaning toward diplomacy, as its representative in the UN said that Tehran is open to forming a regional nuclear consortium in the event of an agreement with Washington.<\/span><\/p>\n
Adding to the upbeat mood is the possibility of the end of the Israel\u2013Gaza war within two weeks, revealed Al Arabiya.<\/span><\/p>\n
In the US, the Federal Reserve’s (Fed) preferred inflation gauge, the core Personal Consumption Expenditures (PCE) Price Index, came in line with estimates in May but failed to show any progress toward disinflation.<\/span><\/p>\n
Earlier, the Minneapolis Fed’s Neel Kashkari commented that he still sees two rate cuts in 2025.<\/span><\/p>\n
Daily digest market movers: Gold price set for correction amid steady US Dollar and US yields<\/span><\/h2>\n
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- Gold price is losing its luster due to market participants becoming increasingly optimistic about the global economy. News of the trade deal with China, as well as those with other countries, including South Korea, Vietnam and the EU, was welcomed by investors.<\/span><\/li>\n
- Howard Lutnick, the US Commerce Secretary, added that China is \u201cgoing to deliver rare earths to us,\u201d and once they do that, \u201cwe\u2019ll take down our countermeasures,\u201d Lutnick told Bloomberg News in an interview.<\/span><\/li>\n
- Core PCE in May rose by 2.7% YoY, a tenth above estimates and April\u2019s data. Headline inflation for the same period increased by 2.3% YoY as expected.<\/span><\/li>\n
- The University of Michigan (UoM) revealed that Consumer Sentiment in June improved moderately. The Index rose from 60.5 to 60.7, while inflation expectations were downwardly revised, with households expecting prices to rise from 5.1% to 5% over the next year. For the next five years, inflation is projected to be around 4%, down from 4.1%.<\/span><\/li>\n
- The US 10-year Treasury note is flat, yielding 4.242%. The US Dollar Index (DXY), which tracks the performance of the buck\u2019s value against a basket of six peers, is virtually unchanged at 97.28.<\/span><\/li>\n
- Minneapolis Fed President Neel Kashkari said an inflation boost is likely coming, but actual inflation indicates renewed progress toward the 2% target. More time is needed to determine whether the effects of the trade war are delayed or if they will be smaller than initially thought.<\/span><\/li>\n
- Money markets suggest that traders are pricing in 63.5 basis points of easing toward the end of the year, according to Prime Market Terminal data.<\/span><\/li>\n<\/ul>\n
Source: <\/span>Prime Market Terminal<\/span><\/a><\/p>\n
XAU\/USD technical outlook: Gold price set for a pullback to $3,200<\/span><\/h2>\n
- Howard Lutnick, the US Commerce Secretary, added that China is \u201cgoing to deliver rare earths to us,\u201d and once they do that, \u201cwe\u2019ll take down our countermeasures,\u201d Lutnick told Bloomberg News in an interview.<\/span><\/li>\n
- US-China trade deal signed; more agreements expected before July 9, boosting sentiment.<\/strong><\/b><\/li>\n
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