"Gold recorded a pullback on Tuesday amid subdued trading conditions. Thinner liquidity amid holidays in major markets could exacerbate short-term price swings. However, the broader outlook for bullion remains largely intact. On the macro front, recent softer US inflation readings have shifted market expectations toward three Federal Reserve rate cuts, rather than two. That repricing has pushed treasury yields to multi-month lows, reinforcing gold's appeal."
"Geopolitically, risk premia remain elevated. While diplomatic channels are active in Eastern Europe and the Middle East, actual deals remain elusive in both regions, sustaining risks and demand for the precious metal. Additionally, ETF flows also improved meaningfully, with a rebound of 14.8 tonnes after the prior week's heavy outflows. Attention now turns to US GDP and PCE data on Friday, alongside the ongoing peace discussions, as the next decisive catalysts."
Gold recorded a pullback on Tuesday amid subdued trading conditions and thinner liquidity around holidays in major markets, which could exacerbate short-term price swings. The broader outlook for bullion remains largely intact as softer US inflation readings repriced markets toward three Federal Reserve rate cuts, pushing treasury yields to multi-month lows and reinforcing gold's appeal. Expectations that the Bank of England could cut rates as early as March add to easing narratives. Elevated geopolitical risk premia and improved ETF flows, including a 14.8-tonne rebound, support demand ahead of US GDP and PCE releases and ongoing peace talks.
Read at London Business News | Londonlovesbusiness.com
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