Gold price (XAU/USD) shot to a multi-day peak around the $2,412-2,413 resistance zone on Tuesday and drew support from various factors.
The Israeli attack on the Lebanon capital as retaliation for a rocket strike in the Golan Heights on Saturday raised the risk of a further escalation of geopolitical tensions in the Middle East. Furthermore, the dismal German GDP print dashed hopes for a recovery in the Eurozone’s largest economy. This comes on top of persistent worries about a slowdown in China – the world’s second-largest economy – and benefitted the safe-haven precious metal.
Apart from this, a modest US Dollar (USD) pullback from a nearly three-week high provided an additional boost to the Gold price. The USD remained depressed during the Asian session on Wednesday amid firming expectations that the Federal Reserve (Fed) will start cutting interest rates in September.
The XAU/USD, however, struggles to gain any follow-through traction as traders prefer to wait for the outcome of a two-day Federal Open Market Committee (FOMC) meeting. In the meantime, the Bank of Japan (BoJ) policy decision might provide some impetus to the non-yielding yellow metal.
Source : FX Street
