Gold prices rebounded sharply from an almost two-month low reached on Tuesday.

The gold price (XAUUSD) attracted some buyers during the Asian session on Wednesday and appears to have broken a three-day losing trend to its lowest level since September 20, near the $2,590-$2,589 range touched the previous day. The increase lacks an evident fundamental trigger and could be due to some repositioning activity ahead of US consumer inflation data.

Crucial data may alter expectations about The Federal Reserve’s (Fed) rate-cutting strategy will provide a fresh stimulus to the non-yielding yellow metal.

Crucial data may alter expectations about The Federal Reserve’s (Fed) rate-cutting strategy will provide a fresh stimulus to the non-yielding yellow metal ahead of the big data risk, the US Dollar (USD) has entered a positive consolidation phase following its recent run to its highest level since early May. This, combined with concerns about how US President-elect Donald Trump’s protectionist tariffs will affect the global economy and a generally softer tone in financial markets, provides some support for the safe-haven gold price. However, the upside for the XAUUSD appears to be limited, given forecast that Trump’s expansionary plans will increase inflation and limit the Fed’s ability to rapidly ease monetary policy.

Daily Market update:Gold prices may struggle to benefit on the upswing amid optimism about Trump’s projected expansionary plans.

The US dollar rose to its highest On Tuesday, gold fell below $2,600 for the first time since September, fuel by excitement about US President-elect Donald Trump’s projected expansionary plans.

Furthermore, the possibility of Trump’s protectionist tariffs being enforce should raise inflation and limit the Federal Reserve’s ability to decrease interest rates, which still supportive of elevated US bond yields.

Richmond Fed President Tom Barkin said Tuesday that inflation may be under control, but the path remains unpredictable, and that the core measure may indicate that it risks remaining beyond the central bank’s 2% objective.

Separately, Minneapolis Fed President Neel Kashkari stated that any upward surprise in inflation in the weeks preceding the The December FOMC monetary policy meeting may persuade the central bank to pause interest rate decreases.

The yield on the benchmark 10-year US government bond remained near to a multi-month high reached following Trump’s victory in the US presidential election, despite lower expectations for dramatic interest rate cuts by the Fed in the future.

Traders are now looking forward to the critical US consumer inflation numbers for a new boost.

The USD bulls take a small breather and await the release of the latest US consumer inflation numbers, which will influence market expectations regarding the Fed’s rate-cutting path and offer new momentum.

The headline Consumer Price Index (CPI) estimated to have climbed by 0.2% in October and by 2.6% over the last year, up from 2.4% in the previous month, fueling There are concerns about the Fed’s ability to continue lowering interest rates.