• Gold trades up 0.07% as markets brace for significant US economic releases.
• US NFIB Small Business Optimism Index exceeds expectations, signaling robust economic sentiment.
• Upcoming CPI and FOMC decision, including the ‘dot plot,’ expected to impact Gold prices amid persistent inflation concerns.

Gold prices advanced for the second straight day amid a stronger US Dollar, yet it remains near familiar levels as traders brace for the release of crucial data from the United States (US). XAU/USD traders are in wait-and-see mode as the Federal Open Market Committee (FOMC) begins its two-day meeting, which will unveil the latest monetary policy decision on Wednesday. The XAU/USD trades at $2,311, up 0.07% and virtually unchanged.

Tuesday’s US economic docket remains scarce with just the release of the May NFIB Small Business Optimism Index, which exceeded estimates and April’s data. On Wednesday, the Consumer Price Index (CPI) is expected to remain firm near April’s numbers, hinting that inflation remains stubbornly high even though the Federal Reserve (Fed) raised rates by more than 500 basis points during the last few years.

After the CPI, the Fed, led by its Chair Jerome Powell, will release its monetary policy statement and the Summary of Economic Projections (SEP), which includes the famous ‘dot plot’ that depicts a “probable path’ for monetary policy.

A Reuters poll hinted that most analysts estimate a 25-basis-point (bps) interest rate cut by the Fed, in 2024. Meanwhile, data from the Chicago Board of Trade (CBOT) shows that the December 2024 fed funds futures contract suggests that most traders expect 28 bps of easing toward the end of the year.

In the meantime, the US 10-year Treasury note yield edges down six basis points to 4.41%, a headwind for the yellow metal. Consequently, the DXY, an index of the US Dollar against six other currencies, increased 0.15% to 105.25.