Gold price (XAU/USD) attracts buyers during the Asian session on Monday as a surprise downgrade of the US government's credit rating tempers investors' appetite for riskier assets and boosts demand for traditional safe-haven assets. Furthermore, US Treasury Secretary Scott Bessent's reaffirmation of President Donald Trump's tariff threats lends additional support to the bullion. Meanwhile, bets that the Federal Reserve (Fed) will cut interest rates further this year keep the US Dollar (USD) depressed and turn out to be another factor lending some support to the non-yielding yellow metal.
However, the optimism over the US-China trade truce for 90 days and hopes for more US trade deals with other countries cap the upside for the Gold price near the $3,250-3,252 supply zone. This makes it prudent to wait for strong follow-through buying before confirming that the XAU/USD has formed a near-term bottom and positioning for an extension of last week's goodish recovery from the $3,120 area, or over a one-month low. In the absence of any relevant market-moving US macro data, speeches by influential FOMC members will drive the USD and provide some impetus to the commodity.
Source: Fxstreet
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