Gold prices continued to trade sideways after traders reacted to the stronger-than-expected US inflation data this week.
The latter has stopped gold’s surge after a three-week winning streak as traders reevaluate their expectations regarding the Federal Reserve’s interest rate cuts this year.
The unforeseen uptick in inflation has introduced a sense of uncertainty into the market, fueling price correction risks. At the same time, the resurgence in treasury yields this week has exerted additional downward pressure on gold prices.
However, markets continue to price in the start of interest rate cuts in June.
Looking ahead, the trajectory of the gold market is likely to be heavily influenced by the outcome of the Federal Open Market Committee (FOMC) meeting next week.
Investors could closely monitor the Federal Reserve’s economic projections as well as its president’s comments after the meeting for any indications of the central bank’s stance on monetary policy as a hawkish tone could further weigh on gold prices.
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