Gold benefits from positive risk appetite, softer US dollar

Gold Price registers gains of 0.03%, and the precious metal is now trading around $1738 as Fed policymakers begin to price a 50 bps rate hike and the US central bank needs to tighten monetary conditions.

The US Dollar edges lower on Tuesday as the American currency is weighed by falling US Treasury bond yields. Gold Price is almost flat on Tuesday’s US session, capitalizing on a softer dollar. Also, sentiment remains fragile due to Covid-19 cases in China.

Market sentiment improved through the day. Fed policymakers grabbed investors’ attention as the US central bank prepared to slow down borrowing costs. Fed’s Loretta Mester said, “Maintaining price stability is a critical objective that will be accomplished using all available means”. She echoed some of San Francisco Fed President Mary Daly’s comments, which added that the Federal Funds rate (FFR) needs to peak at around 5%.