Gold price (XAU/USD) is facing downward pressure in Monday’s early New York session as investors adopt a cautious stance ahead of crucial economic releases scheduled for the week. The precious metal’s upside remains limited due to the Federal Reserve’s (Fed) hawkish stance on interest rates, while geopolitical tensions related to the Middle East crisis act as a downside restraint.
Fed policymakers have consistently indicated the likelihood of interest-rate hikes later this year, although they have refrained from providing a detailed timeframe. The lack of concrete evidence that inflation will sustainably decrease to the 2% target continues to shape the central bank’s cautious approach.
The movement in the Gold price is closely tied to the performance of the US Dollar, which is attempting to recover as investors shift their focus toward the US core Personal Consumption Expenditure (PCE) Price Index data for January. The PCE data, the Fed’s preferred inflation gauge, is scheduled for release on Thursday and is expected to influence market expectations regarding potential rate cuts. The US Dollar Index (DXY), measuring the Greenback against major currencies, is trading near 103.80.
