Gold Price Analysis: XAU/USD wavers around $1,900 on USD recovery

Gold snaps two-day uptrend, bounces off intraday low.
Strong US inflation expectations join stimulus hopes to propel the greenback.
US Treasury yields lack upside momentum, stock futures stay mildly positive.
Sino-American tension, covid headlines can entertain traders before the key Thursday.
Gold (XAU/USD) buyers take a breather around $1,900, down 0.16% while bouncing off intrday low of $1,894.57, after a two-day upswing before Tuesday’s European session. Although doubts over the US Federal Reserve’s (Fed) future moves put a safe-haven bid under the valuable metal, the US dollar’s rebound favors gold sellers lately .

US Inflation expectations are the key…
Even US Treasury Secretary Janet Yellen said higher rates are “good” for the Fed, US inflation expectations, per St. Louis Fed data, drop to rock bottom since late April, mainly thanks to the downbeat jobs report published on Friday.

With the receding risk of inflation within the US, market players are optimistic for Thursday’s headline Consumer price level (CPI) for May, expected 4.7% versus 4.2% prior. Though, a robust print of the Fed’s preferred gauge of inflation, namely the Core PCE (personal consumption expenditures price index), tests the greenback buyers, which successively keeps the gold prices upbeat.

Other than the inflation fears, chatters over US President Joe Biden’s infrastructure and spending plan, also because the US-China tussles, also help the US dollar index (DXY) to select up bids for the primary time since Thursday, up 0.10% intraday by the press time.

Additionally, a relatively stronger US recovery from the pandemic versus doubts over the unlock within the UK and Europe also likely to possess put a bid under the US currency and snatched the push to risk-safety from gold.


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