During early trading hours on Tuesday, the price of gold continued to rise above the mid-$2,150 mark. This upward movement can be attributed to the market’s expectations of interest rate cuts by the U.S. Federal Reserve (Fed) this year, as well as the dovish comments made by Fed officials. These factors have put pressure on the U.S. Dollar (USD) and provided some support to gold, which is denominated in USD. Currently, the price of gold is trading at $2,171, reflecting a 0.04 percent increase for the day.
In Saudi Arabia, the value of 24-karat gold experienced on Tuesday, March 26 a decline, reaching 3.057 Saudi Riyal (SAR). Additionally, within the Kingdom, 10 grams of 24K gold are currently being sold for SAR2.623, while the price per ounce of gold stands at SAR8.160.
Read more: Gold prices in Saudi Arabia gain, but dollar strength limits record highs
The U.S. Dollar Index (DXY), which measures the value of the USD against a basket of currencies used by U.S. trade partners, has retreated from its multi-week high of 104.50 and is hovering around 104.20. Meanwhile, U.S. Treasury bond yields have seen a slight increase, with the 10-year yield standing at 4.25 percent.
Traders closely monitoring PCE data
The rise in the price of gold is primarily driven by increased expectations of rate cuts in 2024. However, traders will closely monitor the U.S. Personal Consumption Expenditures Price Index (PCE) data for February, which will be released on Friday, to confirm the timing of these rate cuts. The forecast for the headline PCE is a 0.4 percent month-on-month increase, while the Core figure is expected to rise by 0.3 percent month-on-month. Traders have already priced in a 70 percent probability of a rate cut in June, compared to 65 percent before the Fed’s March meeting last week.
In addition, the recent attacks on Russian refineries and escalating geopolitical tensions in Eastern Europe and the Middle East may lead to an increase in safe-haven flows, which could benefit the price of gold.
Looking ahead, market participants will be focused on several key indicators. On Tuesday, attention will be on the U.S. Consumer Confidence data by the Conference Board, Durable Goods Orders, and the FHFA’s House Price Index. Later in the week, the U.S. Gross Domestic Product Annualized for the fourth quarter (Q4) will be released on Thursday, followed by the U.S. PCE report on Friday.
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