Gold price prolongs its strong uptrend, climbs to fresh all-time peak beyond $2,350 level

LONDON (April 9) Gold price (XAU/USD) attracts some buyers for the third straight day on Tuesday – also marking the tenth day of a positive move in the previous eleven – and climbs to a fresh all-time peak during the first half of the European session. The optimism over a possible ceasefire between Israel and Hamas fades rather quickly, which is evident from the cautious market mood. This, in turn, is seen as a key factor acting as a tailwind for the safe-haven precious metal.

Meanwhile, the flight to safety drags the US Treasury bond yields away from a multi-month peak touched on Monday. This keeps the US Dollar (USD) bulls on the defensive and lends additional support to the non-yielding Gold price. That said, expectations that the Federal Reserve (Fed) could delay cutting interest rates should limit any meaningful downfall in the US bond yields and the USD, which, in turn, should cap the XAU/USD amid overbought conditions. 

Traders might also prefer to wait for more cues about the Fed's rate-cut path before placing fresh directional bets. Hence, the focus will remain glued to the release of the US consumer inflation figures for March on Wednesday, which will be followed by the FOMC meeting minutes. This, in turn, will play a key role in influencing the near-term USD price dynamics and provide some meaningful impetus to the Gold price. 

Daily Digest Market Movers: Gold price bulls retain control near all-time peak amid persistent geopolitical tensions

• The upbeat US jobs data released on Friday, along with the recent hawkish remarks by Federal Reserve officials, force investors to trim their bets for the total number of rate cuts in 2024 and cap gains for the Gold price. 
• Chicago Fed President Austan Goolsbee acknowledged on Monday that the US economy remains strong, but the central bank must determine how long to be restrictive on monetary policy without damaging the economy. 
• Minneapolis President Neel Kashkari said that the inflation rate is running around 3%, and the Fed has to get back down to 2%. The labor market is not red hot like it was 12 months ago, but it's still tight.
• The markets are now pricing in a nearly 50% chance that the Fed will leave the policy rate unchanged in June, lifting the yield on the benchmark 10-year US government bond to its highest level since late November.
• Elevated US Treasury bond yields act as a tailwind for the US Dollar and further contribute to keeping a lid on the non-yielding yellow metal, though geopolitical tension might continue to lend some support.
• Israel's Prime Minister Benjamin Netanyahu said that a date has been set for a ground offensive in the southern Gaza city of Rafah, tempering hopes for a potential ceasefire and keeping a lid on the latest optimism.
• Investors now look to the US Consumer Price Index (CPI) and the FOMC meeting minutes on Wednesday for clues about the Fed's rate-cut path, which should provide a fresh directional impetus to the XAU/USD.

FXStreet