Gold Price Forecast: Dollar Strength, Fed Rate Cut, and Inflation Data Shape Gold's Path

Gold Price Forecast: Dollar Strength, Fed Rate Cut, and Inflation Data Shape Gold's Path

Gold faced its steepest weekly decline in over five months, pressured by a strengthened U.S. dollar and rising Treasury yields following Donald Trump's election win. The dollar index gained 0.6% as investors anticipated inflationary effects from Trump's proposed fiscal policies. This upward pressure on bond yields made non-yielding assets like gold less attractive, contributing to the metal’s recent pullback.

Looking ahead, next week’s Consumer Price Index (CPI) and Producer Price Index (PPI) data will be crucial. These inflation metrics could signal how aggressively the Federal Reserve may act on interest rates, affecting gold's appeal. If the data confirms inflationary trends, the Fed may maintain a cautious approach to rate cuts, potentially keeping gold under pressure. In the current technical landscape, traders are monitoring gold's pivot point at $2697.28, which will likely influence the market direction in the coming week.

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