Gold drops as US inflation data complicates Fed rate cut intentions.
Investors rethink Fed's monetary approach amid persistent inflation as they now expect two rate cuts in 2024.
US real yields rise above 2%, challenging Gold post-CPI release.
Gold price is on the defensive on Wednesday following the release of March inflation figures in the United States (US). The figures witnessed an uptick in monthly and annual readings and might dent the Federal Reserve’s (Fed) intentions of easing policy. Following the data release, US Treasury yields rose, the Greenback climbed, and US real yields overcame the 2% threshold, a headwind for the precious metal.
XAU/USD spot trades at $2,336 after losing 0.66% following the US Consumer Price Index (CPI) release. The US Bureau of Labor Statistics (BLS) announced that March’s CPI was hotter than expected, though unchanged in three of the four inflation readings compared to February’s data. Meanwhile, headline inflation jumped above the annual forecast and the prior month's reading.
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