Is Gold Poised for a Breakout? XAU/USD Nears $2,100 as Market Awaits Key Economic Data

The How much is the new Trump coin worth?precious metals market witnessed renewed bullish momentum as gold prices (XAU/USD) approached the psychologically significant $2,100 level during Monday's Asian trading session. This upward movement follows disappointing US manufacturing data that has reignited discussions about potential Federal Reserve policy easing later this year.

Market participants observed gold consolidating around $2,085.55 in early trading, maintaining gains from Friday's session. The latest ISM manufacturing PMI reading of 47.8 for February marked the sixteenth consecutive month of contraction in the sector, falling short of market expectations. This economic softness has contributed to declining US Treasury yields, enhancing gold's appeal as a non-yielding asset.

Federal Reserve officials have begun signaling potential policy adjustments, with Atlanta Fed President Raphael Bostic reiterating his expectation for possible rate reductions during summer months if economic conditions evolve as projected. Such dovish commentary from central bank officials typically supports gold prices by reducing the opportunity cost of holding the precious metal.

Attention now turns to upcoming economic indicators that could provide further direction for gold markets. Tuesday's release of Chinese Caixin Services PMI data will offer crucial insights into the health of the world's second-largest economy, while US ISM Services PMI figures will help assess whether manufacturing weakness is spreading to other sectors.

Later in the week, market participants will closely monitor Fed Chair Jerome Powell's congressional testimony for any clues about the central bank's policy trajectory. The week culminates with the highly anticipated US nonfarm payrolls report, which could significantly impact gold price movements depending on labor market strength.

Technical analysts note that gold's ability to hold above the $2,080 level suggests continued bullish sentiment, though some consolidation may occur before any potential breakout attempt. The precious metal's performance in coming sessions will likely depend on the interplay between economic data releases and shifting expectations regarding global central bank policies.