Gold price retreated on Monday after hitting all-time highs of $2,354 during the mid-North American session. The yellow metal advance continues amid higher US Treasury yields and less likelihood of additional rate cuts by the Federal Reserve (Fed). A stronger-than-expected US Nonfarm Payrolls report last Friday wasn’t an excuse for the non-yielding metal’s advance. At the time of writing, XAU/USD trades at $2,327, posting decent gains of 0.30%.
Expectations for rate cuts by the Fed and central bank buying remain the main drivers behind Gold’s rally. In the meantime, Wall Street banks began to revise their forecasts upward. According to sources cited by Marketwatch, Citi analysts updated their forecast for three months to $2,400, and their more bullish scenario sees the precious metal at $2,500.
The latest employment report witnessed the economy adding more jobs than expected, while the Unemployment Rate dropped. In the meantime, Fed rate cut expectations are adjusting, with investors speculating that the US central bank might begin reducing rates in July rather than June. The chances of a rate cut in June are 50%, while for July they stand at 69%.
In the meantime, Fed officials remain optimistic that they will cut rates but emphasize the need to be patient.
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