Gold prices (XAU/USD) encountered new selling pressure during the early European session on Thursday, interrupting a three-day winning streak that peaked at around $2,341-$2,342 on Wednesday. This decline follows a surprising hawkish stance from the Federal Reserve (Fed), which overshadowed softer US consumer inflation figures.
The Fed’s revised projections now indicate only one rate cut in 2024, compared to the three cuts anticipated in March. This shift is a significant factor diverting investment away from the non-yielding yellow metal.
Concurrently, the Fed’s updated outlook has led to a rise in US Treasury bond yields and bolstered the US Dollar, further weighing on the US Dollar-denominated gold price. However, ongoing geopolitical tensions in the Middle East and renewed political uncertainties in Europe may help mitigate more substantial losses in gold prices.
Traders are now focusing on Thursday’s US economic releases, including the Producer Price Index (PPI) and Weekly Initial Jobless Claims data, to identify short-term trading opportunities.
