Daily Digest Market Movers: Gold price draws support from June Fed rate cut bets, geopolitical risks

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  • A hot US inflation report fuelled speculations that the Federal Reserve may delay interest rate cuts and pushed the US Treasury bond yields, underpinning the US Dollar and weighing on the Gold price on Tuesday.
  • The headline US Consumer Price Index (CPI) rose by the 3.2% YoY rate in February from the 3.1% previous and expected, while the annual Core CPI came in at 3.8%, slightly above estimates for a reading of 3.7%.
  • According to the CME Group's FedWatch tool, the markets are still pricing in around a 70% chance that the US central bank will cut interest rates in June, which caps the USD and limits losses for the XAU/USD.
  • A Qatari official said on Tuesday that Israel and Hamas are not close to a deal to halt the fighting in Gaza and free hostages, and warned that the situation remained very complicated despite weeks of truce talks.
  • Iran-aligned Houthi rebels in Yemen said that they would escalate their military operations during the Muslim holy month of Ramadan in solidarity with Palestinians and response to the ongoing war in Gaza.
  • The United States conducted six self-defence strikes, destroying an unmanned underwater vessel and 18 anti-ship missiles in retaliation to the two anti-ship ballistic missiles fired into the Red Sea by the Houthis.
  • This should help limit the downside for the safe-haven precious metal as traders look to next week's highly anticipated FOMC meeting for cues about the rate-cut path and before placing fresh directional bets.


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