Gold prices fell during the Asian trading period on Tuesday after 9 sessions of continuous ascent, but they are still very close to the all-time highs recorded by gold last Friday near the levels of 2195.50 dollars per ounce, supported by the cessation of the downward trend of the US dollar along with US Treasury bond yields.
We are waiting for the US inflation data represented by the Consumer Price Index, which may give some clues as to when the Fed may start cutting interest.
The annual US Consumer Price Index is expected to rise by 3.1% in February at the same pace as we saw in January, while core inflation is expected to decline from 3.9% in January to 3.7% year-on-year, and the monthly consumer price index, which is the most important today, is expected to rise by 0.4% last month against an increase of 0.3% in January. Core CPI inflation is expected to decline from 0.4% to 0.3%.
Markets are now pricing in a 75 basis point cut in US interest rates this year, with a 55.5% chance of a first cut at the June meeting.
The results of the Fed's upcoming decisions, especially the tone of the point chart, will decisively affect gold's short-term performance and its long-term attractiveness as a non-yielding asset amid low interest rates.
The US Treasury Department is also scheduled to sell 10-year bonds worth 39 billion dollars later in the day, if there is no great demand for bonds, this may lead to higher yields, which will lead to a decline in gold, and vice versa in the case of a high demand for bonds.
Finally, the gold price may witness a sharp downward correction if the US inflation data comes hotter than expectations and inflation rises this month, and vice versa if it is below expectations and therefore we may see a new record high for gold.
The gold price is likely to maintain the momentum of cautious trading until the data date.
