• Gold price bounces off 10-week-old horizontal support but braces for the first monthly loss in four.
• Fears of higher Federal Reserve rates, no rate cuts in 2023 underpin US Dollar and weigh on XAU/USD.
• Geopolitical concerns add strength to the Gold price weakness.
• Monday’s holiday in the United States, Canada may offer a soft start to the key week, FOMC Minutes will be eyed closely.

Gold price (XAU/USD) stays defensive around $1,842, after bouncing off multi-day-old horizontal support the previous day. In doing so, the yellow metal portrays the XAU/USD traders’ cautious mood ahead of this week’s bumper data and events. Adding strength to the metal’s inaction could be the United States and Canadian holidays on Monday. Even so, hawkish bets on the Federal Reserve (Fed) and firmer US data keep the Gold sellers hopeful of witnessing further downside should the scheduled catalysts favor the bears.

Gold bears cheer upbeat United States data, Federal Reserve talks

With the firmer prints of the United States Consumer Price Index (CPI) and Retail Sales following the previously flashed upbeat readings of employment and output data, the odds of the US economy witnessing easy inflation appear far from here. The same joins hawkish Federal Reserve comments to underpin the firmer US Treasury bond yields and the US Dollar to exert downside pressure on the Gold price.

In the last week, the US Consumer Price Index (CPI) rose past market expectations to 6.4% YoY, versus 6.2% forecast and 6.5% prior. More importantly, CPI ex Food & Energy, better known as the Core CPI, grew 5.6% YoY compared to 5.5% market forecasts and the 5.7% previous readings.

Following that, US Retail Sales growth jumped to 3.0% YoY in January versus 1.8% expected and -1.1% prior. Further, The Retail Sales ex-Autos grew by 2.3% in the same period, compared to analysts' estimate of 0.8%.

As per the latest Federal Reserve (Fed) talks, Fed Governor Michelle Bowman said on Friday that they are seeing a lot of inconsistent data in economic conditions, as reported by Reuters. On the contrary, Richmond Fed President Thomas Barkin said on Friday that they are seeing some progress on inflation with demand normalizing, as reported by Reuters. It should be noted that Fed Chairman Jerome Powell and others at the Fed have strongly favored an absence of rate cuts in 2023, which in turn backed the higher Fed rates and risk-off mood, which in turn propelled the US Treasury bond yield and the US Dollar, ultimately weighing on the Gold price.

Amid these plays, the US 10-year Treasury bond yields rose to the highest levels since early November while the equity benchmarks were mostly in the red. That said, the US Dollar Index (DXY) marked the third consecutive weekly gain.