XAU/USD Loses Strength under $1,700, First Time in Two Months

Strong Anticipations that The Federal Reserve will keep tightening its monetary policy keep repelling traders from the non-profiting Gold. Initially, the reason why the Fed keeps tightening monetary policy is to curb inflation. Frankly, the market is currently considering the possibility of a 75 basis points rate increase at Fed’s gathering this month. Furthermore, this was bolstered by Jerome Powell’s comments during last week’s Friday.

This present downtrend appears to be unmoved by the risk-off environment. Usually, this will favor the XAU/USD price dynamics. Also, market feelings stay weak amidst anxieties about the world economic downturn. Furthermore, this anxiety was strengthen by the publication of a poor Caixin/Market Chinese Production PMI. The figure of this data dropped to 49.5 last month.

More XAU/USD Price Factors

Additionally, the new Covid-19 lockdown in China alters the appetite of investors for risk. This was revealed by the poor tone of the money market. Consequently, this gave the path of lowest resistance for spot price to the downside. Consequently, this will affect the XAU/USD price since China is one of the big buyers of Gold (XAU/USD).

Next up is the publication of the United States ISM Production PMI. Also, this may affect the USD and will give some stimulus to the XAU/USD price dynamics. Nevertheless, attention will Be on the United States monthly employment statement, which will be published on Friday. Aditionally, the well-known Non-farm payroll is going to reveal more about the health of the economy as inflation keeps increasing. This will play an important part in propelling the short-term demands for the USD. Also, this will influence the direction of the XAU/USD price.

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