Gold Rebounds as Weak USD Fades Hawkish Fed Bets

The price of Gold (XAU/USD) has rebounded from its two-day losing streak, buoyed by the recent US Dollar (USD) pullback. However, hawkish expectations for the Federal Reserve's policy path and persistent geopolitical uncertainties have capped the safe-haven buck and limited gains for the non-yielding bullion.

Traders are wary of aggressive directional bets and are waiting for the release of key US inflation figures due later this week. The US Producer Price Index (PPI) is set to be released on Thursday, followed by the Consumer Price Index (CPI) on Friday.

The outcome of these data releases will have a significant impact on near-term USD price dynamics and provide valuable cues for Gold prices. Strategists at OCBC note that stronger jobs data has reinforced the resilience of the US economy, keeping the risk of Fed tightening alive and restraining USD downside.