Gold (XAU/USD) prices reversed a modest Asian session decline to the $2,679 area and is currently trading just below a one-month high touched on Friday, though the upside seems limited.
The upbeat US Nonfarm Payrolls (NFP) report reinforced market expectations that the Federal Reserve (Fed) will pause its interest rate-cutting cycle later this month.
This, coupled with persistent geopolitical risks, dampened investors' appetite for riskier assets, which was evident from a softer tone around equity markets and acted as a tailwind for the safe-haven precious metal.
Meanwhile, hawkish Fed expectations remained supportive of a pickup in the US Treasury bond yields and kept the US Dollar (USD) uptick in gains near two-year tops.
This might hold traders from placing aggressive bullish bets around the non-yielding Gold price. Investors might also choose to stay on the sidelines ahead of the release of US inflation figures later this week.
Nevertheless, the fundamental backdrop suggests that the path of least resistance for XAU/USD is to the upside and supports prospects for an extension of the three-week-old uptrend.
Source: FXStreet
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