Gold prices are trading slightly lower on Monday morning, as the US dollar holds near recent highs and investors adopt a cautious stance ahead of this week's US inflation figures. The precious metal remains sensitive to expectations surrounding Federal Reserve monetary policy, with the prospect of further interest rate increases and elevated Treasury yields continuing to limit its upside potential. The focus this week will be on the release of US consumer inflation figures on Wednesday, followed by producer prices on Thursday. Higher-than-expected readings could reinforce expectations of further tightening by the Fed, potentially pushing the dollar and Treasury yields higher and putting additional pressure on gold. Conversely, softer figures could ease those expectations and provide some support to prices. Despite the current pressure, the underlying outlook for gold remains positive. Geopolitical uncertainty, concerns over rising government debt and continued central bank purchases should help contain the downside. Against this backdrop, gold prices could experience some volatility in the coming sessions, with the direction of the market largely dependent on this week's inflation figures and their implications for monetary policy.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and as such is to be considered to be a marketing communication.
All information has been prepared by ActivTrades (“AT”). The information does not contain a record of AT’s prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk. Forecasts are not guarantees. Rates may change. Political risk is unpredictable. Central bank actions may vary. Platforms’ tools do not guarantee success.