Gold Price Forecast: XAU/USD holds positive ground near $1,980, eyes on FOMC Meeting Minutes
- Gold price gains ground around $1,980 on the weaker USD.
- The US October leading indicator dropped 0.8% MoM vs. 0.7% MoM fall prior.
- FOMC Meeting Minutes will be a closely watched event on Tuesday.
Gold price (XAU/USD) snaps the two-day losing streak during the early Asian trading hours on Tuesday. The lower US Treasury yields weigh on the Greenback and lift the USD-denominated gold. On a quiet day in terms of US economic data, traders await the Federal Open Market Committee (FOMC) Meeting Minutes on Tuesday, which might offer hints regarding future policy rate direction and inflation improvement. Gold price currently trades around $1,980, gaining 0.11% on the day.
Meanwhile, the US dollar Index (DXY), an index of the value of the USD measured against a basket of six world currencies, declines to 103.44, the lowest level since late August. The US Treasury bond yields consolidate their losses, with the 10-year yields standing around 4.42%.
The US October leading indicator dropped 0.8% MoM from September’s reading of 0.7% MoM fall, the Conference Board revealed Monday. The attention will turn to the FOMC Meeting Minutes on Tuesday. Investors believe that the US Federal Reserve (Fed) is done with its cycle of interest rate hikes, and anticipate that the central bank may begin to cut the rates around the middle of 2024. This, in turn, drags the Greenback lower and boosts the USD-denominated gold. According to CME's FedWatch Tool, markets have priced in a 50% chance of a cut of at least 25 basis points by May 2024.
Gold traders will focus on the FOMC Meeting minutes on Tuesday for fresh impetus. Also, the US Existing Home Sales and the Chicago Fed National Activity Index will be due on Tuesday. These events could give a clear direction to the gold price.