Gold Prices Face Downward Pressure Ahead of FOMC Rate Decision

Gold prices have been trending downward for three consecutive weeks, with last week's 1.8% decline indicating fading momentum from its August surge.

The precious metal initially fell in reaction to US CPI data on Friday but then rallied sharply before fading into the close, finishing the session 0.7% higher.

Heading into this week, technical momentum suggests further moderate losses ahead of the FOMC rate decision on Wednesday, particularly given stronger inflation data and warnings from Kevin Warsh about the risk of inflation remaining above target for too long.

Oil prices have surged in recent days, adding another source of inflationary pressure to the market, while US Treasury yields continue to push higher, making it an unfavorable macro environment for gold.