Gold trades just below $2,500 as risk recedes, markets are calm, and the US Dollar recovers marginally.
Traders await US labor market data this week before determining their next moves.
The $2,500 level is key from a technical perspective, and it is threatening to give way under bearish pressure.
Gold (XAU/USD) edges lower into the $2,490s on Tuesday as a measure of market calm descends, which does little to drive up demand for safe-haven Gold.
The US Dollar (USD) – to which Gold is negatively correlated – slows in its recovery rally, trading only marginally higher on Tuesday as traders keep their powder dry ahead of the release of potentially market-moving US labor market data later this week.
Investors appear to be calmly awaiting the final “test results” for the patient – in this case the US economy – before drawing any conclusions about the likely course of action ahead, in terms of the Federal Reserve’s (Fed) decision on how much to cut interest rates – a key driver of Gold.
Demonstrations in Tel Aviv, demanding a ceasefire in Gaza after seven Israeli hostages were found dead, and the calling of a general strike by Israeli workers have, if anything temporarily, dialed down the threat level in at least one key geopolitical hotspot, adding to the uneasy calm permeating markets.
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