Gold price gains momentum around $1,925 on Monday amid the cautious mood.
Markets anticipate the Federal Reserve (Fed) to hold interest rates steady at its September policy meeting.
The upbeat Chinese economic data boosts gold prices, adding to signals that the nation’s economy’s contraction has peaked.
Market players will closely watch the Federal Reserve (Fed) Interest Rate Decision on Wednesday.
Gold price (XAU/USD) trades in positive territory for the third consecutive day during the early Asian session on Monday. China’s stimulus measure and stronger-than-expected economic data last week add to signals that the world’s second-biggest economy’s contraction has peaked, which benefits the precious metal. Gold price currently trades around $1,924, gaining 0.02% on the day.
Meanwhile, the US Dollar Index (DXY) hovers around 105.20 after retreating from a nine-month high of 105.40. While, the US Treasury yields edge higher with the 10-year US bond staying near 4.30% by the press time. However, the potential of a significant corrective move in the US dollar (USD) might be limited, owing to the cautious mood in the market ahead of the US Federal Reserve’s (Fed) monetary policy meeting on Wednesday.
The market expects the Federal Reserve (Fed) to hold interest rates steady at its September policy meeting while keeping one more rate hike on the table. Fed Chairman Jerome Powell will later hold a press conference with no major changes expected from the Fed. However, a dovish stance from official might trigger a decline in the US Dollar (USD) and acts as a tailwind for the gold price.
Furthermore, the upbeat Chinese economic data boosts gold prices as China is the major Gold consumer in the world. The National Bureau of Statistics (NBS) revealed on Friday, that Chinese Retail Sales for August improved 4.6% YoY compared to the previous reading of 2.5%, exceeding market expectations. In the meantime, the nation’s Industrial Production rose to 4.5% in August from 3.7% in July, above market expectations of 3.9%.
Looking ahead, market participants will focus on the Fed Interest Rate Decision on Wednesday. Also, the preliminary S&P Global PMI data for September will be released on Friday. These events could give a clear direction to the gold price.