Gold prices experienced a decline early Tuesday, with traders opting to cash in profits as anticipation builds ahead of the upcoming US Federal Reserve (Fed) interest rate decision scheduled for Wednesday.
Adding to the downward pressure on gold prices is a cautiously optimistic market sentiment and a broad rebound in the US Dollar (USD). This comes as reports emerge of potential truce talks, with Hamas reportedly considering a new framework proposed by Egypt, which could lead to a pause in hostilities in Gaza. Receding geopolitical tensions have dampened the appeal of gold as a safe-haven asset in the short term.
Despite these factors, the downside in gold prices appears to be limited, partly due to encouraging data from China’s Manufacturing PMI for April. As the world’s largest gold consumer, improved economic activity in China has helped support demand for the precious metal.
Looking ahead, gold traders will closely monitor key US economic indicators such as the ADP Employment Change, JOLTs Job Openings data, and the Fed’s policy announcements on Wednesday. The movement of gold prices will also be influenced by broader market sentiment and fluctuations in the US Dollar.