Gold's Rebound Limited as Fed Rate Hike Expectations Intensify

Gold prices rebounded by 0.7% to $4,142.89 per ounce on Tuesday after touching a seven-week low of $4,112.97.

The recovery was limited by expectations of Federal Reserve rate hikes, with the dollar and U.S. Treasury yields continuing to exert pressure on non-yielding gold.

Analysts characterized the rebound as a technical correction following Monday's nearly 4% plunge, noting that gold still faces significant headwinds due to rising market expectations for Fed rate hikes.

Peter Grant, vice president and senior metals strategist at Zaner Metals, said 'Today's move is simply a correction of yesterday's decline. I still think gold faces some fairly significant headwinds.'

Market participants are now focused on this week's economic data, including the PCE inflation report and nonfarm payrolls data, which will influence market expectations for Fed rate hikes and shape the trajectory of gold.