Gold Price Struggles to Lure Buyers

SEATTLE (Scrap Monster): Gold price (XAU/USD) attracts some sellers on Tuesday and stalls the previous day's modest bounce from the $2,145 zone, or over a one-week low. The stronger US inflation figures released last week fuelled speculations that the Federal Reserve (Fed) will stick to its higher-for-longer interest rates narrative and also modify its forward guidance to two 25 basis points rate cuts in 2024 instead of the three projected previously. This remains supportive of elevated US Treasury bond yields and lifts the US Dollar (USD) to a nearly two-week high, which, in turn, is seen undermining the non-yielding yellow metal. 

That said, the markets are still expecting the Fed to start the rate-cutting cycle as early as the June policy meeting. This, along with persistent geopolitical tensions stemming from the protracted Russia-Ukraine war and conflicts in the Middle East, could offer some support to the safe-haven Gold price and help limit losses. Traders might also prefer to wait for more cues about the Fed's rate-cut path before placing fresh directional bets around the XAU/USD. Hence, the focus remains on the crucial FOMC decision on Wednesday, which will drive the USD demand and provide a fresh impetus to the precious metal.

 Courtesy: www.fxstreet.com