Gold prices moved lower, marking a modest downturn amidst a strong dollar and a continuing uptick in Treasury yields, as market participants await key inflation data that might shed light on the Federal Reserve’s upcoming interest rate decisions.
The yellow metal could remain under pressure as US 10-year treasury yields reached a multi-week high.
Gold prices could remain capped in the near term, following recent commentaries from several Federal Reserve officials, notably Minneapolis Fed President Neel Kashkari, who stated on Tuesday that interest rates could be maintained as long as necessary or even increased if required, diminishing hopes for imminent monetary policy easing.
Attention is now shifting to the upcoming US Personal Consumption Expenditures (PCE) data, the Fed’s preferred inflation gauge, set to be released on Friday. This data will be closely watched for indications of the Fed’s forthcoming actions. A reading above expectations could further place additional downward pressure on gold prices.
At the same time, central bank and Chinese purchases could continue to support gold prices in the medium term, with strong purchases witnessed in the first quarter.
