- Gold price remains clings to the range-bound theme around $2,025 on the softer USD.
- The Federal Reserve (Fed) indicated that it will begin monetary policy easing after data showed declining inflation.
- Gold traders will focus on the US housing data on Tuesday.
Gold price (XAU/USD) sticks to the range-bound theme near $2,025 during the early Asian trading hours on Tuesday. The positive momentum in yellow metal remains intact, supported by a modest pullback in the US Dollar (USD) and lower US Treasury bond yields.
Meanwhile, the US Dollar Index (DXY), a measure of the value of the USD against a weighted basket of currencies used by US trade partners, trades flat near 102.50. The Treasury yields rose modestly, with the 10-year yield standing at 3.93%.
The Federal Reserve (Fed) indicated that it will begin monetary policy easing after data showed declining inflation and an economy prepared for a soft landing. New York Fed President John Williams stated that it’s premature to talk about rate cuts while Fed President Mary Daly said that interest rate cuts may be needed in 2024 to avert an overtightening. Daly further stated that more rate cuts could be appropriate if inflation drops faster and that fewer cuts would be warranted if progress in inflation stalls.
Gold traders will keep an eye on the US housing data on Tuesday, including Building Permits and Housing Starts. The US Gross Domestic Product Annualized (Q3) will be released on Thursday, which is expected to remain steady at 5.2%. The key event to watch this week will be the Fed's preferred gauge of inflation, the Core Personal Consumption Expenditures Price Index (PCE). Traders will take cues from these figures and find a trading opportunity around the gold price.
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