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Gold Prices Heat Up, How Inflation and the Fed Are Shaping the Market!
Gold prices saw a notable increase during Tuesday’s trading session, supported by a weaker U.S. dollar and declining U.S. Treasury yields, as investors awaited U.S. inflation data to assess the Federal Reserve's monetary policy outlook amid rising global economic and trade tensions.
Dollar and Treasury Yields
The U.S. dollar index approached its lowest level in four months, making gold more attractive to holders of other currencies. Meanwhile, 10-year U.S. Treasury yields declined, further boosting demand for the precious metal as a safe-haven asset.
Awaiting U.S. Consumer Price Index (CPI) Data
Investors are now focused on the release of the U.S. Consumer Price Index (CPI) on Wednesday, which will help determine the Federal Reserve’s stance on interest rates and its impact on gold prices in the near future.
Gold is traditionally viewed as a hedge against inflation and economic risks, but continued interest rate hikes by the Federal Reserve could reduce its appeal as a non-yielding investment asset.
Gold Prices at Monday’s Settlement
Gold prices declined during Monday’s session due to profit-taking after last week’s strong gains, as markets awaited key inflation data.
Gold futures for April delivery fell 0.5% or $14.7, settling at $2,899.40 per ounce.
Gold and Dollar Prices Now
Spot gold rose 0.4% to $2,901.13 per ounce.
U.S. gold futures increased 0.2% to $2,905.70 per ounce.
Meanwhile, the U.S. dollar index dropped 0.35%, reaching 103.58 points.
Investors remain on high alert for inflation data, which will shape the future direction of U.S. interest rates and their impact on gold prices in the coming days.
