Gold Price Plunges as Inflation Concerns Loom Ahead of FOMC Decision

Gold prices have continued to decline, falling 1.8% last week and marking its third consecutive weekly drop. The precious metal initially fell after the US CPI data release on Friday but then rebounded in a 'sell the news' reaction before closing the session 0.7% higher.

The technical momentum suggests further losses ahead of the FOMC rate decision on Wednesday, particularly with 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 to the pressure, while US Treasury yields continue to rise, making it a challenging macro environment for gold. With real yields and interest rate expectations moving higher, gold remains vulnerable, especially if the US dollar continues to find support.