Gold price remains depressed amid risk-on mood,traders keenly await US CPI report.
Gold price (XAU/USD) meets fresh supply during the Asian session on Wednesday and erodes a part of the previous day's modest recovery gains from a one-week trough. Easing fears about US President-elect Donald Trump's disruptive trade tariffs, along with Tuesday's softer-than-expected inflation data from the US, remains supportive of the risk-on mood. This, in turn, is seen as a key factor undermining demand for the safe-haven precious metal.
Moreover, the upbeat US monthly jobs report released on Friday reaffirmed the Federal Reserve's (Fed) hawkish outlook and keeps the US Treasury bond yields elevated, which contributes to driving flows away from the non-yielding Gold price. The US Dollar (USD), meanwhile, languishes near the weekly low touched on Tuesday. This, along with geopolitical risks, lends support to the XAU/USD ahead of the crucial US Consumer Price Index (CPI) report.
A Bloomberg report, citing people familiar with the matter, said on Monday that US President-elect Donald Trump's economic advisers are considering a program to gradually increase tariffs month by month.Moreover, softer-than-expected inflation data from the US helped pause the recent surge in the US Treasury bond yields and boosted investors' appetite for riskier assets, undermining the safe-haven Gold price. The US Bureau of Labor Statistics reported on Tuesday that the Producer Price Index, which measures wholesale inflation, rose 0.2% in December and the core gauge remained flat during the reported month.This comes on the back of the upbeat US monthly jobs report on Friday and makes it difficult for investors to project the Federal Reserve's next moves on interest rates, which keeps the US Dollar bulls on the defensive. (Cay)
source: fxstreet
