- Gold is struggling to gain significant momentum and remains trapped in a range on Tuesday.
- Risk appetite and high US bond yields appear to be acting as a headwind for the yellow metal.
- The selling trend around the dollar continues to offer support ahead of the crucial US CPI report.
The price of Prayed lacks firm direction and fluctuates between lukewarm gains and small losses above the $1,720 level at the start of the European session on Tuesday. XAU/USD remains below two-week highs hit the previous day as investors now await the latest US consumer inflation figures for further momentum.
A survey released Monday by the Federal Reserve Bank of New York indicates that consumer expectations for US inflation for the coming years fell sharply to the lowest level since October last year. Therefore, the US CPI report will be seen as a sign of a sustained decline in inflation in the country. This could raise expectations of less aggressive tightening of monetary policy by the Fed, which in turn could help gold gain some significant traction.
In the meantime, risk appetite, represented by the positive tone in equity markets, is seen as a headwind for the safe-haven precious metal. This, along with high yields on US Treasuries, helps limit gold price gains. The US dollar, meanwhile, is weakening near the monthly low reached the previous day and could continue to lend some support to the yellow dollar-denominated metal, at least for now.
Given the risk of key data, investors also seem reluctant to open aggressive positions on gold and prefer to stay on the sidelines. This is yet another factor that has led to moderate and range-bound price action, and warrants caution before positioning for an extension of the recent rally from below the $1,700 level.
gold technical levels
Source: Fx Street
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