Gold (XAU/USD) prices attracted some sellers during the Asian session on Thursday (23/1) and for now, seems to have snapped three consecutive days of gains to the highest levels since early November, around the $2,763-$2,764 region touched the previous day. The US Dollar (USD) seems to extend its overnight recovery from monthly troughs amid a further recovery in the US Treasury bond yields. This, along with the underlying bullish sentiment around the equity markets, turned out to be the key factors weighing on the safe-haven demand for the precious metal.
Meanwhile, signs of easing inflation in the US revived bets that the Federal Reserve (Fed) will cut interest rates twice this year. This could act as a drag on the US bond yields and the USD. Additionally, uncertainty surrounding US President Donald Trump's tariff plans, which could trigger a trade war and increase market volatility, should help limit the downside in Gold prices. Hence, it would be prudent to wait for a strong follow-through sell-off before confirming that the month-long uptrend has run out of steam and prepare for deeper losses.(AL)
Source: FXstreet
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