Gold Price Attracts Some Sellers on Hawkish Fed-Inspired USD Strength

SEATTLE (Scrap Monster): Gold price (XAU/USD) meets with a fresh supply during the early European trading hours and erodes a part of Friday's positive move in the wake of the Federal Reserve's (Fed) hawkish surprise. In fact, policymakers lowered their forecast for the number of rate cuts this year to one from three projected in March. This remains supportive of elevated US Treasury bond yields, which allows the US Dollar (USD) to stand tall near its highest level since early May touched on Friday and is seen as a key factor driving flows away from the non-yielding yellow metal.

That said, the possibility of two Fed rate cuts in 2024 remains on the table amid signs of easing inflationary pressure in the US. This, in turn, is holding back the USD bulls from placing aggressive bets and lending some support to the Gold price. Apart from this, persistent geopolitical tensions in the Middle East, along with political uncertainty in Europe, should help limit losses for the safe-haven metal. Hence, it will be prudent to wait for some follow-through selling before positioning for the resumption of the XAU/USD's pullback from the all-time peak touched in May. 

 Courtesy: www.fxstreet.com