Gold (XAU/USD) prices remained strongly offered through the early European session on Monday (2/12) and is currently trading near the lower end of its daily range, around the $2,629 region. This marked the first day of a negative move in the previous five and was sponsored by a combination of factors. Investors now seem convinced that US President-elect Donald Trump's tariff plans could reignite inflation and limit the scope for the Federal Reserve (Fed) to cut interest rates. This, in turn, triggered a fresh leg up in the US Treasury bond yields and drove flows away from the non-yielding yellow metal.

Meanwhile, a pickup in the US Treasury bond yields helped the US Dollar (USD) to regain some positive traction after the recent corrective slide to near three-week lows, which turned out to be another factor that dented demand for Gold prices. That said, trade war fears, along with persistent geopolitical tensions and a softer risk tone, offered some support to the safe-haven precious metal. Traders also seemed reluctant and preferred to wait on the sidelines ahead of this week's key US macro data, which could provide cues on the Fed's rate cut path and provide a fresh directional impetus to XAU/USD.

Source: FXStreet