Gold managed to create a new ATH level around $2,620 at the close of trade last week on the back of aggressive interest rate cuts by the Federal Reserve (Fed) and rising geopolitical tensions in the Middle East.
At 9.30am, the price of gold was at $2,618.90, down 0.12% since it opened in early Asian trading on Monday.
The Federal Open Market Committee (FOMC) cut interest rates by a surprise 50 basis points at its meeting last week with markets expecting more cuts before the end of 2024.
In addition, fears of increased tensions in the Middle East after Hezbollah promised to respond to the bomb attack pushed gold prices up recently.
On Sunday, Hezbollah and Israel exchanged fire and they launched missiles into Israeli territory after facing several devastating bombardments.
However, the yellow metal's gains stalled after the Fed saw the potential for broader growth in the US economy.
They predict that the US economy will grow by about 2.0% per year until the end of 2027 and suggest a 'soft landing' and drag gold down.
For now, gold investors will be closely monitoring developments surrounding geopolitical risks in the Middle East and the US Purchasing Managers' Index (PMI) reading released on Monday.
If the results are stronger than expected, this could support the USD and put some pressure on gold.
