Gold looks to build on Tuesday’s post-US CPI bounce from one-week-low
Gold (XAU/USD) is trading with a positive bias during the Asian session on Wednesday and looking to build on the previous day's bounce from the $3,331 area, or a one-and-a-half-week low.
The broadly in-line July US consumer inflation figures released on Tuesday reinforced bets that the Federal Reserve (Fed) will lower borrowing costs at the upcoming monetary policy meeting in September. This keeps the US Dollar (USD) on the defensive and turns out to be a key factor acting as a tailwind for the non-yielding yellow metal.
However, the underlying bullish sentiment, bolstered by an extension of the US-China trade truce and the US-Russia summit aimed at ending the war in Ukraine, might cap the upside for the safe-haven Gold.
This, along with the recent repeated failures to find acceptance above the $3,400 mark, makes it prudent to wait for strong follow-through buying before confirming that the XAU/USD pair has formed a near-term bottom. Traders now look to speeches from influential FOMC members for some impetus later this Wednesday.
Source : Fxstreet
