The gold price rose slightly on Tuesday morning, after gaining more than 2% in the previous session.
The precious metal continues to be supported by increasingly cautious expectations of the US Federal Reserve, following the release of weak US Purchasing Managers’ Index data for the manufacturing sector, which has heightened fears of an economic slowdown in the world’s largest economy and fueled expectations of an interest rate cut.
US intervention in Venezuela increases demand for safe-haven assets
Demand for safe-haven assets has also increased following the weekend’s events in Venezuela and subsequent comments from President Trump, which appeared to raise the prospect of similar military action in other countries in the region.
Against this backdrop, it is not surprising that gold prices are rising and have further upside potential. Nevertheless, traders are likely to remain cautious about building large long positions ahead of Friday’s US jobs data, which is likely to be crucial for expectations regarding the Fed’s future course.
Ricardo Evangelista – Senior Analyst, ActivTrades
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