Gold Prices Retreat to $2700 Level Amid Mixed Fundamental Cues
Gold (XAU/USD) prices reversed the Asian session’s decline to sub-$2,700 levels, although it remains below its highest level in over a month hit on Thursday (12/12). The US consumer inflation data released on Wednesday reaffirmed bets that the Federal Reserve (Fed) will deliver its third straight interest rate cut next week. Moreover, persistent geopolitical risks stemming from the Russia-Ukraine war and conflicts in the Middle East, along with concerns about US President-elect Donald Trump’s upcoming trade tariffs, continued to act as a tailwind for the safe-haven precious metal.
Meanwhile, investors now seem convinced that the Fed will take a cautious stance on cutting interest rates amid signs that progress in lowering inflation towards its 2% target has almost stalled. This led to a further rise in the US Treasury bond yields, which acted as a tailwind for the US Dollar (USD) and kept a lid on any further upside for the non-yielding Gold prices. Nonetheless, the above-mentioned fundamental backdrop suggests that any correction may still be seen as a buying opportunity. Traders now eye the US Producer Price Index (PPI) for fresh impetus.
Source: FXStreet
