• Gold Price pares losses after reversing from a convergence of 21-EMA, 50-EMA.
• Pre-Fed positioning, firmer United States Treasury bond yields allow US Dollar to grind higher, weigh on XAU/USD.
• Dicey markets, US-China tussles also exert downside pressure on the Gold Price.
• US Core Inflation will be crucial to determine Fed moves even as markets seem prepared for hawkish FOMC halt.

Gold Price (XAU/USD) prods two-day downtrend with the latest corrective bounce off $1,950, grinding higher as it approaches the key $1,967 resistance confluence during early Tuesday in Asia, close to $1,958 at the latest. That said, the XAU/USD began the week on a back foot amid market’s indecision ahead of the top-tier central bank events and doubts about the major consensus favoring no rate hike from the Federal Reserve (Fed). However, the US Dollar’s failure to stay strong joins the mixed headlines about the central banks and Treasuries, as well as geopolitics, to allow the precious metal to consolidation rencet losses ahead of the key United States Consumer Price Index (CPI) data for May.

Gold Price prods bears amid Federal Reserve concerns

Gold Price dropped in the last two consecutive days while reversing from a crucial Exponential Moving Average (EMA) resistance confluence (see technical analysis). Even so, the metal buyers remain hopeful and print corrective bounce off the $1,950 mark on Monday as the United States Federal Reserve (Fed) appears to have many reasons to not go forward with its rate hike trajectory.

That said, a study from the San Francisco Fed about the correlation of wage growth and inflation could be cited as the first reason for the US central bank to remain less hawkish. The survey concluded that wage growth has a very small impact on inflation, which in turn raises doubts about the central bankers’ emphasis on wage cost numbers as a source of information to gauge inflation pressure.

Additionally, challenges for the US central bank and grim concerns about the same also prod the US Dollar and allow the Gold Price to consolidate the previous losses. Former Fed vice chair Richard Clarida came out with comments that it may be more difficult to get inflation near 2% than in the past 15 years. Further, “Expect a hawkish skip this week,” Former President of Bosteon Federal Reserve Bank, Eric Rosengren, tweeted early Monday.

With this in mind, the market players place heavy bets on the Federal Reserve’s (Fed) inaction on Wednesday’s Federal Open Market Committee (FOMC) while also expecting a 0.25% rate hike in July.

Even so, firmer yields and fears of economic slowdown, as well as a likely pressure on the banking system due to the bond market moves backed by the debt-ceiling deal, seem to restrict the Gold Price rebound ahead of the key US Consumer Price Index (CPI) data.

As per the latest updates, the US Treasury Department, a $240 billion deficit could be found, which in turn pushed the officials to issue more bonds. The same drives down the prices of traditional haven and propel the yields. It’s worth noting that the concerns about the Fed’s no rate hike and previously downbeat US data exert downside pressure on the Treasury bond coupons and the US Dollar