Gold prices experienced modest gains on Monday amid a subdued trading session, with investors preparing for upcoming monetary policy decisions from major central banks. While the Bank of Japan (BoJ) and the Bank of England (BoE) are set to announce their decisions, the focus remains squarely on the Federal Reserve (Fed).
Market attention is particularly directed towards the Fed, as any hawkish inclination in its stance could propel XAU/USD prices towards the $2,100.00 mark. This anticipation is fueled by aggressive short positioning on the Greenback by market participants. As of the latest update, Gold is trading around $2,160.55, reflecting a 0.22% increase.
Despite recent speculations that the Fed may embark on monetary policy easing sooner than anticipated, Gold’s performance last week was marred by a close to 1% decline. This decline was triggered by unexpected acceleration in inflation rates on both the consumer and producer fronts in the United States (US), leading to a surge in US Treasury bond yields. Consequently, the US Dollar Index (DXY) recorded gains of more than 0.69% throughout the week, contributing to Gold’s downturn.
As investors await the central bank decisions and assess the evolving economic landscape, the trajectory of Gold prices hinges significantly on the Fed’s forthcoming stance. Any signals of tightening monetary policy could exert downward pressure on Gold, while a dovish outlook may provide support to the precious metal.
