Update: Gold continued with its struggle to find acceptance or build on the momentum beyond the $1,900 mark and witnessed some fresh selling on the last trading day of the week.
The commodity dropped to fresh session lows, below the $1,885 level in the last hour and has now erased the previous day’s post-US CPI gains.
Nevertheless, gold remains on track to end with modest losses for the second consecutive week as the market focus now shifts to the upcoming FOMC policy meeting on June 15-16.
The greenback fell in tandem with the US rates on Thursday after strong US CPI data failed to ignite investors’ beliefs that the Fed could begin dialing back stimulus, as they continued to see the price rise as temporary.
Meanwhile, a dovish stance by the ECB and optimism on the US infrastructure spending plan also collaborated with the upside in the gold price.
Despite a hotter-than-expected US CPI print, markets remain hopeful that the Fed will dismiss the price rise as temporary and maintain its accommodative monetary policy stance until its employment goals are achieved.
The narrative around the dovish Fed expectation will continue to play out heading into the FOMC decision due next week, underpinning the sentiment around gold.
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Gold price has retraced below the $1900 mark once again, having tested Tuesday’s high near $1903.
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