Gold rises on rising US Treasury yields and Fed's hawkish outlook

• Gold gains more than 0.30% despite pressure from high US Treasury yields
• Hardline statements from Fed officials, including Governor Michelle Bowman, moderate Gold's rise.
• XAU/USD traders are keeping an eye on the release of US core PCE inflation data.

The price of Gold rose modestly at the end of the North American session, posting gains of around 0.15% amid high US Treasury yields that make holding the metal less attractive. Consequently, the Dollar erased its previous losses, capping Gold's rally. XAU/USD is trading at $2.357, up 0.28% from its opening price.

Wall Street is trading at a loss, while the yield on the 10-year Treasury note rises sharply to its highest level since early May. This caused a rise in real yields, which generally correlate inversely with Gold prices, putting a limit on the yellow metal's advance.

Federal Reserve (Fed) officials crossed lines on Tuesday, delivering a hawkish message. On the data front, Conference Board (CB) consumer confidence improved in May, but recession fears have resurfaced.

Later in the week, traders prepare for the long-awaited release of the April Personal Consumption Expenditure (PCE) Price Index, the Federal Reserve's (Fed) preferred measure of inflation. The underlying figure is expected to be 2.8% YoY, while headline PCE is expected to rise 0.3% MoM.

Market movements in the daily summary: The price of Gold oscillates around $2,350

• Gold prices remain in the green but are trading below three-day highs of $2,364 amid elevated US Treasury yields.
• The yield on the US 10-year Treasury note is 4.538%, up seven basis points and supporting the Dollar. The DXY Dollar Index, which tracks the performance of the greenback against a basket of peers, is trading at 104.61, up 0.03%.
• Fed Governor Michelle Bowman said she would have supported waiting to slow the pace of quantitative tightening or a more gradual slowdown in balance sheet reduction.
• Finally, Minneapolis Fed President Neel Kashkari stated that he does not believe anyone has ruled out further rate increases and added that he anticipates no more than two rate cuts in 2024.
• US Conference Board consumer confidence improved in May after three months of declines, rising to 102.0 from 97.0, beating estimates of 95.9.
• Despite the improvement, Dana Peterson, chief economist at the Conference Board, wrote, “a possible resurgence of recession concerns.”
• Americans' perception of the likelihood of a US recession in the next 12 months increased again in May.
• Federal funds rate futures estimate just 25 basis points of interest rate cuts in 2024, according to data provided by the Chicago Board of Trade (CBOT).

Technical Analysis: Gold Price Holds Firm as Buyers Lose Momentum

Gold's bullish trend remains in place, but the rally is showing signs of exhaustion, with momentum beginning to fade. The RSI shows that the buyers are in charge but losing momentum as the RSI flattens.

Therefore, if XAU/USD fails to sustain gains above $2,350, that will put downward pressure on the yellow metal, exposing key support levels.

The first support would be the psychological figure of $2,350. Once cleared, the next target would be the May 8 low of $2,303, followed by the May 3 cycle low of $2,277.

On the other hand, if XAU/USD remains above $2,350, further gains are expected. The next target would be $2,400, followed by the year-to-date high of $2,450 and then the $2,500 mark.