• Gold gains ground despite broad US Dollar strength, traders focus on the upcoming US Consumer Price Index (CPI) release.
• CME FedWatch Tool shows 73% odds of a 25 bps Fed rate cut, shifting from previous speculation of a 50 bps move.
• US Treasury yields remain stable, while traders await further clues on inflation trends and the Fed’s rate path.

Gold gained ground on Monday as traders braced for the release of August’s inflation report in the United States (US) and looked for hints that the Federal Reserve (Fed) would cut rates by 50 or 25 basis points. At the time of writing, XAU/USD trades at $2,502, up by 0.23%.

Market mood improved during the overnight session for North American traders, as evidenced by solid gains in US equities. US Treasury bond yields retreated somewhat along the short and long end of the curve with the 10-year T-note yielding 3.706% unchanged compared to last Friday’s close.

Bullion traders ignored broad US Dollar strength as the Greenback posted gains of over 0.30%, according to the US Dollar Index (DXY), which measures the buck’s performance against six currencies.

Meanwhile, traders pared odds for a 50 bps rate cut following last Friday’s Nonfarm Payrolls (NFP) figures, which despite missing the mark showed the Unemployment Rate ticking lower from 4.3% to 4.2%. Now, eyes are on the release of the Consumer Price Index (CPI), which is expected to dip further toward the Fed’s 2% goal.