Gold prices (XAU/USD) traded with a mild positive bias on Wednesday, buoyed by a weaker US Dollar. Increased gold demand from robust over-the-counter (OTC) market investments, steady central bank purchases, and safe-haven flows amid geopolitical tensions in the Middle East provided additional support for XAU/USD. However, hawkish comments from Federal Reserve (Fed) officials, including Chairman Jerome Powell’s suggestion to maintain higher interest rates for an extended period, could pressure the yellow metal in the near term.
The upcoming release of the US Consumer Price Index (CPI) for April later on Wednesday is highly anticipated, as it may provide critical insights into the Fed’s timeline for potential rate adjustments. Additionally, April’s Retail Sales data will be published, offering a glimpse into consumer spending trends.
Should the inflation data exceed expectations, it might prompt a more aggressive stance from the Fed, strengthening the US Dollar and potentially exerting downward pressure on gold prices.
