Gold prices experienced a retreat from near-weekly highs during Wednesday’s North American session, as an uptick in risk appetite tempered bullish sentiment. This unexpected turn occurred despite hawkish commentary from US Federal Reserve (Fed) officials. The decline in US Treasury bond yields coupled with a weakened Greenback acted as mitigating factors, preventing a more pronounced plunge in gold prices.
At $2,375, XAU/USD trades down 0.34% after briefly touching a daily high of $2,395, falling just short of breaching the $2,400 mark. Notably, tensions in the Middle East appeared to subside following remarks from Israeli officials indicating a postponement of potential strikes against Iran. However, the situation remains fluid, with the US poised to impose new sanctions on Iran in the coming days, as stated by Jake Sullivan, the White House National Security Advisor.
Shifting focus to economic indicators, Fed Chair Jerome Powell acknowledged the robust performance of the US economy, albeit highlighting concerns regarding recent data indicating a lack of significant progress on inflation. Powell’s commentary underscores the delicate balance the Fed faces in navigating economic recovery while addressing inflationary pressures.
Despite the initial bullish momentum, gold prices encountered resistance amid improving risk sentiment and geopolitical developments in the Middle East. However, uncertainties persist, and market participants remain attentive to both economic data and geopolitical dynamics for further cues on gold’s trajectory in the coming sessions.
