Gold price (XAU\/USD) falls to around $5,075 during the Asian trading hours on Monday, pressured by a stronger US Dollar (USD) and inflationary risks. Traders will closely monitor the developments surrounding the US-Iran conflicts and geopolitical risks in the Middle East. The US Consumer Price Index inflation report (CPI) will be in the spotlight later on Wednesday.\u00a0<\/p>\n
The precious metal faces some selling pressure as a rally in crude oil prices stokes inflation fears in the US, raising the chance that the US Federal Reserve<\/a> (Fed) will hold interest rates<\/a> higher for longer. Higher borrowing costs are typically negative for the non-yielding Gold<\/a> price.\u00a0<\/p>\n The US central bank is expected to hold rates steady at its upcoming meeting on March 17-18. Many economists anticipate the next rate cut will not occur until June or July 2026.<\/p>\n Fed Governor \u200cChristopher Waller said that he thought the rise in oil prices was “more like a one-off event” that would not require a Fed response but also acknowledged the uncertainties if the conflict persists and oil prices keep rising.<\/p>\n On the other hand, the weaker-than-expected US Nonfarm Payrolls (NFP) could weigh on the Greenback and lift the USD-denominated commodity price in the near term. The February jobs report showed a decline of 92,000 payrolls, while the Unemployment Rate rose to 4.4% in February from 4.3% in January.\u00a0<\/p>\n Risk sentiment FAQs<\/p>\n In the world of financial jargon the two widely used terms \u201crisk-on\u201d and \u201crisk off” refer to the level of risk that investors are willing to stomach during the period referenced. In a \u201crisk-on\u201d market, investors are optimistic about the future and more willing to buy risky assets. In a \u201crisk-off\u201d market investors start to \u2018play it safe\u2019 because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.<\/p>\n Typically, during periods of \u201crisk-on\u201d, stock markets will rise, most commodities \u2013 except Gold \u2013 will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a \u201crisk-off\u201d market, Bonds go up \u2013 especially major government Bonds \u2013 Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit. <\/p>\n The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are \u201crisk-on\u201d. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.<\/p>\n The major currencies that tend to rise during periods of \u201crisk-off\u201d are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world\u2019s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them \u2013 even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.<\/p>\n","protected":false},"excerpt":{"rendered":"Gold price (XAU\/USD) falls to around $5,075 during the Asian trading hours on Monday, pressured by a stronger…\n","protected":false},"author":2,"featured_media":465363,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[84,59,56,54,55],"class_list":{"0":"post-465362","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-business","9":"tag-gb","10":"tag-uk","11":"tag-united-kingdom","12":"tag-unitedkingdom"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/465362","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=465362"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/465362\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/465363"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=465362"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=465362"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=465362"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}