The price of gold has experienced significant fluctuations but generally shows an upward trend on Tuesday evening, following the release of the Empire State Manufacturing Index from the United States, which came in at -8.10. This figure is better than the expected -18 and improves upon the previous data of -20. Although this data still indicates a contraction in manufacturing activity in New York, the improvement suggests that the economic slowdown may not be as severe as feared by the market.
However, this improvement is not robust enough to alter expectations that the U.S. economy is gradually losing momentum. Market participants continue to believe that the Federal Reserve will be contemplating monetary policy easing in the coming months, especially if other economic data trends indicate a decrease in consumption and employment. The anticipation of potential interest rate cuts remains a significant catalyst for the strength of gold, as the precious metal typically benefits in low-interest-rate environments.
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Despite some fluctuations following the data release, gold continues to maintain a bullish bias, as the dovish sentiment towards the Federal Reserve persists. If future U.S. economic data continues to depict uncertainty or moderate weakening, the chances for gold to revisit its historical highs remain bright, with market focus now shifting towards the Federal Reserve’s upcoming statements and key inflation data on the horizon.
