Gold Price Steady Above One-Week Low on Weakening USD; Gains Remain Capped

Gold Prices Struggle Amid Fed Rate Speculation and Key Economic Events

Gold (XAU/USD) prices are facing challenges as they attempt to recover from a one-week low near the $2,644-$2,643 range, hit during the Asian trading session on Monday. The precious metal’s inability to gain significant traction stems from growing expectations that the Federal Reserve (Fed) may take a less dovish stance on rate cuts next year. Investors increasingly believe the Fed will proceed cautiously, given signs that progress toward the 2% inflation target has stalled. This outlook has kept US Treasury yields elevated, creating a headwind for the non-yielding gold market.

Market participants appear hesitant to make bold moves in gold prices ahead of the highly anticipated Federal Open Market Committee (FOMC) policy decision on Wednesday. In the lead-up to this crucial event, US bond yields have experienced a modest pullback, which has put pressure on the US Dollar (USD). Despite this, Gold finds some support from ongoing geopolitical tensions and uncertainties surrounding US President-elect Donald Trump’s upcoming policies.

Traders are also eyeing the release of flash global purchasing managers’ indexes (PMIs) for fresh insights and short-term trading opportunities. These developments, combined with broader market dynamics, are likely to influence gold’s near-term trajectory.

Stay tuned for updates as the market braces for pivotal events that could shape gold prices and broader financial trends this week.