Gold prices retreated sharply on Monday, pulling back from near $2,350 despite a decline in US Treasury yields, which typically undermines appetite for the Greenback. Traders are gearing up for a busy week of economic releases in the United States (US), including inflation figures, Retail Sales data, and a speech by Federal Reserve (Fed) Chair Jerome Powell on May 14.
Earlier in the day, Fed Vice-Chairman Philip Jefferson addressed the media in a Q&A session at the Cleveland Fed, expressing the Fed’s stance on inflation. He mentioned, “We continue to look for additional evidence that inflation is going to return to our 2% target.”
The XAU/USD pair is currently trading at $2,336, down 1%, influenced by a prevailing risk-on sentiment. Wall Street continues to post gains, and recent labor market data, including April’s Nonfarm Payrolls and last week’s Initial Unemployment Claims, may influence the Fed’s policy decisions.
In its latest monetary policy statement, Fed officials acknowledged that the risks to achieving the dual mandate of maximum employment and price stability have become more balanced over the past year.
Looking ahead, the US Bureau of Labor Statistics (BLS) is set to release producer and consumer inflation data for April on May 14 and 15. If price pressures reaccelerate, the Fed may maintain higher interest rates for a prolonged period to address inflation concerns. This prospect could continue to impact gold prices in the near term.
