Gold Price Forecast: XAU/USD Gains Ground Above $2,400, Eyes on Fedspeak

Gold prices (XAU/USD) increase to around $2,415 early Monday in Asia, helped by lower US inflation in April. Meanwhile, the USD Index (DXY), tracking the dollar’s value against six other currencies, falls slightly to 104.50, losing 0.03%. Investors look forward to speeches from Fed officials Bostic, Barr, Waller, Jefferson, and Mester.

The idea that the US Federal Reserve might cut rates in 2024 helps gold (XAU/USD) because lower rates make gold more attractive to investors. April’s US CPI inflation fell to 0.3% from 0.4% the month before. Both overall and core CPI were lower but met market expectations.

However, the Fed’s careful approach might limit gold’s rise, as higher interest rates can reduce investment in gold. Last week, Fed Chair Jerome Powell said more data is needed to see if inflation is falling towards 2%. Many Fed officials also said rates need to stay high longer, which strengthens the US dollar.

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