Gold price holds steady above $2,600 as market adjusts ahead of US CPI report.

  • Gold price staged a notable recovery from a nearly two-month low touched on Tuesday.
  • Elevated US bond yields and a bullish USD might cap gains for the non-yielding XAU/USD.
  • Traders now look forward to the crucial US consumer inflation figures for a fresh impetus. 

    Gold price (XAU/USD) attracts some buyers during the Asian session on Wednesday and for now, seems to have snapped a three-day losing streak to its lowest level since September 20, around the $2,590-$2,589 region touched the previous day. The uptick lacks any obvious fundamental catalyst and could be attributed to some repositioning activity ahead of the US consumer inflation figures. The crucial data might influence expectations about the Federal Reserve's (Fed) rate-cut path and provide a fresh directional impetus to the non-yielding yellow metal. 

    Ahead of the key data risk, the US Dollar (USD) enters a bullish consolidation phase following the recent upsurge in its highest level since early May. This, along with fears that US President-elect Donald Trump’s protectionist tariffs will impact the global economy and a generally weaker tone around the equity markets, offers some support to the safe-haven Gold price. The upside for the XAU/USD, however, seems limited amid expectations that Trump's expansionary policies could boost inflation and restrict the Fed from easing its monetary policy aggressively.

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Cross-Asset Analyst & Trainer

Varun Sharma

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