Ella 
During early Asian trading on Monday, the price of gold (gold/USD) closed on a positive line for the third consecutive day. China’s stimulus measures and stronger-than-expected economic data last week added to signs that the contraction in the world’s second-largest economy has peaked, which is bullish for precious metals. Gold is currently trading around $1,924, up 0.02% on the day.
Meanwhile, the U.S. dollar index (DXY) is hovering around 105.20 after retreating from a nine-month high of 105.40. U.S. Treasury yields moved higher, with the 10-year U.S. Treasury yield remaining near 4.30% at press time. However, the potential for a sharp correction in the U.S. dollar (USD) may be limited due to cautious market sentiment ahead of Wednesday’s U.S. Federal Reserve (Fed) monetary policy meeting.
The market expects the Federal Reserve (FED) to keep interest rates stable at its September policy meeting while retaining the possibility of another rate increase. Federal Reserve Chairman Jerome Powell will hold a press conference later, and the Fed is not expected to make major changes. However, a dovish stance from Fed officials could trigger a decline in the U.S. dollar (USD) and be positive for gold prices.
In addition, upbeat Chinese economic data will also boost gold prices because China is the world’s major gold consumer. Data released by the National Bureau of Statistics on Friday showed that China’s retail sales rose 4.6% year-on-year in August, compared with 2.5% in the previous month, beating market expectations. Meanwhile, China’s industrial production rose to 4.5% in August from 3.7% in July, beating market expectations of 3.9%.
Market participants will focus on Wednesday’s Federal Reserve interest rate decision. Additionally, preliminary data on the S&P Global Purchasing Managers Index for September will be released on Friday. These events could give gold prices a clear direction.
