Ella 
Gold prices closed lower on Thursday for the first time in four days, but held firm below the $2,300 round-figure mark, stabilizing above it in early European trading on Friday. However, the upside for gold prices seems to be limited due to the hawkish stance of the Federal Reserve. In fact, Fed policymakers only predict one rate cut in 2024, which is a key factor that continues to be bearish for interest-free gold. In addition, the overall positive risk base, coupled with a slightly higher US dollar, limited the commodity’s gains.
At the same time, the market still prices a greater chance that the Federal Reserve will start a rate cut cycle as early as September, as there are signs of weakening inflationary pressures in the United States. This dragged down US Treasury yields to the lowest level since April, which may limit any meaningful gains in the US dollar and support gold prices denominated in US dollars. Coupled with the continued geopolitical tensions in the Middle East and the re-emergence of political uncertainty in Europe, caution should be exercised before going short on gold/dollar and betting on it to continue its decline since its all-time high in the $2,450 area.
