During Wednesday’s North American session, gold prices steadily climbed as buyers set their sights on the $2,200 mark. With a relatively quiet economic calendar in the United States (US), investors turned to the yellow metal amidst increasing speculation of a potential rate cut by the Federal Reserve (Fed) in June. At the time of reporting, the XAU/USD pair traded at $2,192, reflecting gains of 0.63% or $13.
The decline in US Treasury yields provided support for gold, a non-yielding asset. The US 10-year benchmark note rate fell by four basis points to 4.19%, leading to a decrease in US real yields from 1.914% to 1.87% at the time of writing, acting as a headwind for the US Dollar (USD).
The US Dollar Index (DXY), which measures the performance of the Greenback against a basket of six major currencies, remained flat at 104.30, posing a challenge for the non-yielding metal.
The economic calendar in the US was notably light, with only a speech by Fed Governor Christopher Waller scheduled around 22:00 GMT. Investors eagerly anticipated the release of the core Personal Consumption Expenditures (PCE) report, the Fed’s preferred measure of inflation, slated for Friday.
Additionally, the week’s economic agenda included key data releases such as the University of Michigan Consumer Sentiment index, Initial Jobless Claims, and the final reading of Gross Domestic Product (GDP), all scheduled for Thursday.
As market participants await further insights into US economic indicators and the Fed’s monetary policy stance, gold prices may continue to be influenced by speculation surrounding potential rate adjustments. Traders will closely monitor upcoming data releases for cues on the trajectory of inflation and economic recovery, which could impact the direction of gold prices in the near term.
