Gold price advances during the North American session as speculation grows that the Federal Reserve (Fed) could begin to cut rates at the next meeting. At the same time, investors await US President Donald Trump's appointment of a new Fed Governor. The XAU/USD trades at $3,381, up 0.20%.

Since last Friday, Bullion prices have recovered after July's Nonfarm Payrolls (NFP) report revealed a significant downward revision to May and June figures. Investors, caught off guard, began to price in the first 25-basis-point rate cut at the September meeting.

On Tuesday, the Institute for Supply Management (ISM) revealed the Services Purchasing Managers Index (PMI), which showed a deceleration in business activity, contrary to economists' expectations. Other data from the Commerce Department indicated that the trade deficit narrowed in June.

The resignation of Fed Governor Adriana Kugler opened the door for Trump to nominate someone to succeed Jerome Powell as the next Fed Chair. The US Treasury Secretary Scott Bessent was one of the nominees, but he told Trump that he is not interested.

Trade news revealed that effective tariffs on August 7 would be between 10% and 41%. The Budget Lab at Yale estimates the average of overall US duties rose to 18.3%, its highest level since 1934.

Given the fundamental backdrop, Gold seems poised to challenge the $3,400 mark. However, the recovery of US Treasury yields and the Greenback could cap Bullion's advance after reaching an eight-day high of $3,390.

This week, the US economic docket will feature Jobless Claims, Consumer Sentiment data and Fed speakers.

Source: Fxstreet