Gold price (XAU/USD) builds on the previous day's goodish recovery from the $3,248-3,247 region or a one-month trough and gains positive traction for the second successive day on Tuesday.
The momentum remains uninterrupted through the early part of the European session and lifts the bullion to a multi-day peak, around the $3,340 area in the last hour. The US Dollar (USD) remains depressed on the back of the growing acceptance that the Federal Reserve (Fed) would resume its rate-cutting cycle in the near future.
Adding to this, concerns about the worsening US fiscal conditions drag the USD to its lowest level since February 2022 and underpin the commodity.
Moreover, the heightened uncertainty over US President Donald Trump's tariff policies ahead of the July 9 deadline is seen as another factor benefiting the safe-haven status of the Gold price. However, the prevalent risk-on environment could act as a headwind for the precious metal.
Traders might also refrain from placing aggressive bullish bets and opt to wait for this week's important US macro releases, including the closely-watched Nonfarm Payrolls (NFP) report on Thursday. Nevertheless, the fundamental backdrop favors the XAU/USD bulls.
Source: Fxstreet
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