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Gold is off to a bearish start at the beginning of a brand new trading week, sliding lower after touching a three-month high during the previous trading session. At the time of writing, XAU/USD is trading at around $1.760 per ounce.
The last week ended on a high on the back of rising expectations for the Fed to ease its aggressive stance towards rate hikes. This sentiment among global investors came after the latest US CPI data came in weaker than expected, supporting hopes for a possible cooling off in inflation, which could signal a less hawkish stance from the US central bank in response.
Additional bullishness in gold was also the result of a weakness in the US dollar on account of this data. As we know, the precious metal shares a negative correlation with the greenback and weakness in the US currency makes gold more appealing for international buyers of the commodity.
XAU/USD
However, on Monday, the yellow metal XAU/USD has dipped on the back of a rise in US bond yields. The benchmark US 10-year Treasury yields picked up after falling to the lowest levels seen in a month, making gold more expensive to hold and denting its appeal among investors.
The commodity is also facing pressure on the back of weaker consumer demand in key markets, India and China. These countries are among the largest consumers of physical gold, but have seen declining interest in the precious metal due to higher rates and inflation.
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