• Gold price hovers near fresh highs around $2,350 as the US Dollar remains sideways.
• US yields rally as traders pare Fed rate cut expectations.
• US inflation could guide market expectations for Fed rate cuts ahead.

Gold price (XAU/USD) records fresh all-time highs just above $2,350 on Monday. The rally in the precious metal remains unabated even though US Treasury yields increase after the robust United States Nonfarm Payrolls report for March shifted expectations for Federal Reserve (Fed) pivoting to rate cuts in the second half of this year.

10-year US Treasury yields rise to four-month highs near 4.45%. Generally, higher bond yields dampen Gold’s appeal as they increase the opportunity cost of holding investment in the latter. However, the case has not held up in the last few weeks.

Fed policymakers don’t see rate cuts as appropriate as robust labor market data could halt the progress in reducing inflation to the 2% target. 

Even one Fed policymaker sees no need for rate cuts this year if price pressures persist. Last week, Minneapolis Fed Bank President Neel Kashkari said rate cuts won’t be required this year if inflation stalls. Kashkari, who is currently not a voting member, warned: “The Fed needs to keep interest rates higher in the range of 5.25%-5.50% if inflation remains stronger than hoped”. He added that “if that still does not work, further rate increases are not off the table, but they are also not a likely scenario given what we know right now," Reuters reports.