Gold price is solidly supported by forecasts on a Fed rate drop later this year.

The gold price (XAUUSD) was up for the third day in a row on Friday. Trading slightly below a near one-month high reached the day before. Data released on Thursday showed hints of lowering inflation in the United States. Supporting predictions of rate reduction by the Federal Reserve (Fed) later this year. This, in turn, is regarded as a critical aspect serving as a tailwind for the Yellow metal that produces no yield.

The existing risk-on climate limits further advances for the XAUUSD.

The rise in gold prices, however, lacks bullish confidence. Despite growing agreement that the US central bank will wait until the June policy meeting to decrease borrowing costs. The hawkish view continues to support rising US Treasury bond yields. Allowing the US Dollar (USD) to maintain stable near the weekly high and limiting the commodity’s gains in the current risk-on environment.
Nonetheless, the gold price is on track to rise for the second week in a row. As investors await significant US macro data due at the start of a new month. Beginning with the ISM Manufacturing PMI later today. Friday’s US economic calendar also includes the revised Michigan Consumer Sentiment Index. Which, together with Fed Speaks, will influence the USD and generate effect on the XAUUSD.

Daily Market Movers: Bets on an expected Fed rate drop continue to bolster the gold price.

The US inflation statistics met market expectations, indicating that the Federal Reserve will continue to decrease interest rates later this year and providing some support for the gold price.
The Core US PCE Price Index, the Fed’s preferred inflation gauge that excludes food and energy prices, increased 0.4% in January, and the annual rate fell to 2.4% from 2.6% the previous month.
Meanwhile, the CME Group’s FedWatch Tool indicates that markets are still pricing in the prospect of the first interest rate decrease in June, and comments have reaffirmed the bets. by many Federal Reserve executives.
Atlanta Fed President Raphael Bostic stated that the rate at which US inflation is lowering indicates that the US central bank would likely begin cutting interest rates during the summer months.
San Francisco Fed President Mary Daly said central bank officials are prepared to decrease interest rates as needed, but there is no pressing urgency to do so given the strength of the US economy.
Cleveland Fed President Loretta Mester stated that recent inflation data implies that policymakers have more work to do to reduce price pressures, but she did not adjust her forecast for three rate reduction this year.
New York Fed President John Williams has underlined. That the US central bank’s next step is likely to

be reduced to its interest rate objective, albeit there is little feeling of urgency to do so.
US Treasury bond yields are approaching recent highs. Which, combined with an extension of the risk-on surge in global equities markets. Limits additional gains for the safe-haven XAUUSD.