Gold price holds ground to continue the winning streak for the fourth consecutive day, trading around $1,930 during the early trading hours of the Asian session on Tuesday. The pair is facing upward support due to the ahead of the interest rate decisions from the major central banks.
The retracement of the US Dollar (USD) is a significant factor bolstering the price of Gold. The market participants turn cautious following the likelihood of the US Federal Reserve (Fed) to keep interest rates unchanged in the upcoming meeting scheduled for Wednesday. Investors will closely analyze the central bank's statements, looking for any indications or information regarding potential future interest rate movements.
The markets are factoring in a 25 basis point rate hike by the end of 2023. Additionally, the resilience of recent economic data from the US is bolstering the possibility that the Fed may keep interest rates higher for a prolonged period, which could put a cap on the potential of the yellow metal.
The US Dollar Index (DXY), which assesses the performance of the US Dollar (USD) against six other major currencies, struggles to hold ground at around 105.10 at the time of writing. The US Treasury yields look to extend the losses registered on Monday. The yield on the US 10-year bond has declined to 4.30% by the press time. The downbeat yields are undermining the strength of the Greenback.
Following a similar path as the European Central Bank (ECB) last week, the Bank of England (BoE) is anticipated to implement a cautious 25 basis point interest rate increase in the meeting on Thursday, with a focus on the potential risks associated with stagflation.
Meanwhile, market participants are pricing in the likelihood that the Bank of Japan (BoJ) will continue to maintain its highly accommodative monetary policy stance.
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