Gold prices (XAU/USD) attracted sellers for the fifth consecutive day and dropped to the lowest level since September 19, around the $2,559-2,558 region during the Asian session on Thursday. The US Dollar (USD) continued its post-election rally and climbed to a new peak so far this year (YTD) on hopes that US President-elect Donald Trump's policies will spur growth. This, in turn, was seen as a key factor that continued to weigh on the USD-denominated commodity.

Meanwhile, investors believe that the protectionist tariffs expected from the new Trump administration could increase inflation and force the Federal Reserve (Fed) to halt its easing cycle. Additionally, US data released on Wednesday showed slower progress in lowering inflation and could result in fewer interest rate cuts next year. This continues to support an increase in US Treasury bond yields and also contributes to driving flows away from non-yielding Gold prices.

Additionally, the generally positive mood in global equity markets exerts additional pressure on the safe-haven precious metal and supports prospects for further downside. Traders are now waiting for the release of the US Producer Price Index (PPI) to see short-term opportunities. However, the focus will remain on the Fed Chair Jerome Powell's speech, which could provide hints regarding the future path of rate cuts and provide a fresh impetus to Gold prices.

Source : FXStreet