During the early European session on Wednesday, the price of gold (XAU/USD) continued its sideways consolidation, remaining within a range just above a one-week low reached on Monday. The release of robust US consumer and producer inflation data last week has sparked speculation that the Federal Reserve (Fed) may postpone potential rate cuts. This hawkish sentiment has contributed to elevated US Treasury bond yields, bolstering the US Dollar (USD) and creating a challenging environment for the non-yielding yellow metal.
Furthermore, the prevailing strong bullish sentiment in global equity markets has further dampened demand for gold as a safe-haven asset. Despite this, bearish traders appear hesitant to take aggressive positions amid ongoing geopolitical tensions and ahead of the highly anticipated FOMC monetary policy decision.
Investors are eagerly awaiting clues about the Fed’s stance on future rate cuts, which will significantly impact near-term USD price dynamics and could potentially provide a new directional catalyst for gold prices.
