Gold prices remain under pressure, reaching multi-month lows, as expectations of tighter monetary policy and a firm dollar create a challenging environment for the precious metal. In the United States, the Federal Reserve is expected to raise interest rates at least once this year, a view that has helped keep Treasury yields elevated and weighed on non-yielding assets such as gold.
Other major central banks could maintain a cautious to hawkish monetary policy stance, which could add to the pressure on the metal
Attention now turns to today’s US inflation data, which could prove decisive for expectations surrounding the Federal Reserve’s next move. A stronger-than-expected reading would likely reinforce the case for additional policy tightening, supporting both the US dollar and Treasury yields while weighing further on gold.
Conversely, signs of easing inflationary pressures could provide some relief for the precious metal. Despite the near-term headwinds, ongoing central bank purchases support the longer-term outlook for gold and limit downside risks.
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