Gold prices weakened slightly in early Asian trading. Spot gold fell around 0.2% to around $4,223.40 per troy ounce. This movement follows a previous rally, and the market is now more cautious while awaiting signals on the direction of interest rate policy from the US central bank, the Federal Reserve (The Fed).

In a note, Sucden Financial assessed that gold and silver movements will remain highly sensitive to indications of whether the Fed will cut interest rates. If interest rate cuts do indeed proceed, this is usually a supportive factor for precious metals because yields on interest-bearing assets tend to fall, making gold and silver relatively more attractive as hedge assets.

In the short term, sentiment towards gold will still be largely influenced by two main factors: the movement of the US dollar and the US employment data due to be released soon. If the US dollar continues to weaken and the employment data shows weakness, the market could rekindle interest in gold. Conversely, if the dollar strengthens or US economic data remains too strong, selling pressure on precious metals could potentially continue. (az)

Source: Newsmaker.id