Gold retreats from the $2,180 mark, reacting to hot US inflation data and Fed's cautious stance on policy easing.
Rise in US Treasury yields post-PPI data release dampens XAU/USD’s appeal despite risk-off market sentiment.
Gold remains subdued as Treasury yields inch higher and the US Dollar strengthens.
Gold spot retreated from around the $2,180 area on Friday, printing back-to-back negative sessions as market players' hope for the beginning of the US Federal Reserve's easing cycle has been delayed due to strong US economic data. Hotter-than-expected inflation figures justify Fed Chair Jerome Powell's remarks to be patient and stick to the current monetary policy stance until the disinflation process evolves. The XAU/USD trades at $2,157.66, down 0.20%.
Wall Street is set to finish Friday’s session on the back foot, reflecting a risk-off mood. Although the Gold price usually capitalizes on it, the rise of US Treasury yields after Thursday’s Producer Price Index (PPI) data kept XAU/USD offered in the European session and toward the end of the trading day.
The yellow metal remained under pressure even though US economic data failed to move the needle. The Fed revealed that Industrial Production improved in February. After that, University of Michigan Consumer Sentiment showed that Americans remain optimistic about the economic outlook.
The XAU/USD treads water as the US 10-year Treasury bond yield surges one basis point to 4.308%, while the US Dollar Index (DXY), a gauge of the buck’s performance versus other currencies, climbs 0.09% to 103.45.
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