GOLD PRICE FALLS FURTHER TOWARDS $2,160 ON FIRM US DOLLAR

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  • Gold price fails to hold all-time highs around $2,220 as the US Dollar strengthens.
  • The US Dollar capitalizes on the strong US economic outlook.
  • The Fed’s rate-cut campaign could be less aggressive compared with other central banks in developed nations.

Gold price (XAU/USD) extends its downside to near $2,160 in Friday’s European session after failing to sustain close to its all-time highs above $2,220. The precious metal faces a sharp sell-off as the US Dollar strengthens on an upbeat United States economic outlook, reinforced by robust Existing Home Sales data released on Thursday. The US Dollar Index (DXY) refreshes a monthly high at 104.41.

Greenback-denominated Gold tends to face liquidity outflows when the US Dollar strengthens. The outlook for the US economy improved after the Federal Reserve upwardly revised growth forecasts for 2024. The Fed sees the US Gross Domestic Product (GDP) growing by 2.1%, up from the 1.4% it projected in December.

10-year US Treasury yields fall to 4.24% as the Fed reiterated on Wednesday that it expects three interest-rate cuts this year. Fed officials stuck to their outlook from December even though the consumer and producer price inflation remained sticky in February. US bond yields remain inside Thursday’s trading range, awaiting a fresh trigger for further guidance.


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