Gold price remains under pressure as sticky US CPI data suggests interest rates will stay high.
Surging rental and healthcare costs drive price pressures in the US economy.
The US Dollar extends its upside amid a risk-off market sentiment, further weighing on Gold.
Gold price (XAU/USD) continues its five-day losing spell on Wednesday as hot United States inflation data suggests the Federal Reserve (Fed) will hold back from cutting interest rates at its monetary policy meeting in May. The opportunity cost of holding non-yielding assets, such as Gold, has risen as the Fed is expected to keep interest rates at their current level for a longer period.
The absence of evidence ensuring the return of the underlying inflation to the 2% target has strengthened the need to maintain a hawkish narrative on interest rates. Fed policymakers are not expected to bring down key rates until they see price pressures easing for a decent period.
The US Consumer Price Index (CPI) grew faster than market expectations due to an uptick in rental and healthcare costs.
Contrary to market action, US Treasury Secretary Janet Yellen said there is progress in the war against persistent inflation despite surging rental prices on Tuesday
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