Gold Price Recovers from Daily Low on Weaker USD but Faces Limitations Amid Risk-On Sentiment

Gold Price Recovers as USD Weakens Amid Risk-Positive Sentiment

Gold prices saw a modest recovery from their daily lows, supported by a weaker US Dollar, which fell to a near two-week low due to speculation about Federal Reserve rate cuts in 2025. However, the broader market sentiment remained risk-positive, with optimism surrounding the US-China trade truce and potential Russia-Ukraine ceasefire talks limiting gold's upside.

The US Dollar's decline is primarily attributed to growing expectations that the Fed may reduce interest rates further, supporting the appeal of gold as a non-yielding asset. However, the optimism from improving geopolitical conditions, particularly the potential for de-escalation in global tensions, is dampening gold's safe-haven demand.

As traders look ahead to upcoming speeches from influential Federal Reserve members, market participants remain cautious, waiting for further clarity on the Fed's monetary policy outlook and its potential impact on both the US Dollar and gold prices.