Gold prices saw an uptick on Monday amidst subdued trading activity due to public holidays observed in both the UK and the US. The precious metal rebounded from its two-week lows of $2,325, buoyed by a decline in US Treasury yields and a weakening US Dollar across major currencies.
As of the latest update, the XAU/USD pair is trading at $2,354, marking a nearly 1% increase. Last week, gold experienced a notable decline of over 3%, primarily driven by solid economic data from the US that dampened expectations of monetary policy easing by the Federal Reserve (Fed) this year.
Fedspeak contributed to the downward pressure on gold prices, as officials acknowledged the prolonged timeline for curbing inflation to the Fed’s 2% core inflation goal. Despite gold’s traditional role as an inflation hedge, the rise in US Treasury yields further weighed on the metal.
Analysts at UBS expressed expectations for continued volatility in gold prices, anticipating shallow setbacks and targeting new record highs later in the year.
Looking ahead, the macroeconomic calendar for the week is relatively sparse, with April’s Personal Consumption Expenditures (PCE) Price Index being a key focus. Estimates suggest that the core reading will show a year-over-year increase of 2.8%, while the headline PCE is expected to rise by 0.3% month-over-month.
