Gold Price Forecast: XAU/USD struggles to capitalize on modest uptick, hovers below $1,950 – by hareshmenghani Gold Commodities RiskAversion CentralBanks
Fitch downgrade of the US rating weighs on the USD and offers some support.gains some positive traction during the Asian session on Wednesday and reverses a part of the previous day's sharp fall to the $1,941 area, or a three-week low. The XAU/USD, however, struggles to capitalize on the modest intraday uptick and currently trade just below the $1,950 level, still up over 0.20% for the day.
Fitch downgraded the US Long-Term Foreign-Currency Issuer Default Rating to 'AA+' from 'AAA', pointing to expected fiscal deterioration over the next three years, an erosion of governance and a growing general debt burden. The announcement tempers investors' appetite for riskier assets, which is evident from a modest decline in the US equity futures and offers some support to the traditional safe-haven Gold price.
In fact, the Advance US Gross Domestic Product report revealed last week that the world's largest economy expanded by a 2.4% annualized pace during the second quarter and eased exaggerated recession fears. Apart from this, data on Tuesday showed the US factory production rebounded in the second quarter and ended two straight quarterly declines.
This, in turn, raises hopes of a soft landing for the US economy, which helps limit any meaningful losses for the USD and keeps a lid on the US Dollar-denominated Gold price. Apart from this, rising bets for additional rate hikes by
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