Gold price consolidates above one-month low, not out of the woods yet

• Gold price ticks higher, though it remains close to a one-month low touched on Monday.
• The Trump-related trades keep the USD near a multi-month peak and cap the precious metal.
• Elevated US bond yields support prospects for XAU/USD to experience further downside.

Gold price (XAU/USD), after recording its steepest weekly decline in over five months, fell over 2% on Monday and dived to its lowest level since October 10 amid strong follow-through US Dollar (USD) buying. Traders anticipate a cautious approach from the Federal Reserve (Fed) moving forward amid hopes that US President-elect Donald Trump’s politics will boost economic growth and inflation. This, in turn, remains supportive of elevated US Treasury bond yields, which pushed the USD to over a four-month top and weighed heavily on the non-yielding yellow metal.

The downward trajectory, however, stalled ahead of the $2,600 mark, amid fears that Trump’s protectionist policies will impact the global economy. This, in turn, drives some haven flows and assists the Gold price in holding steady during the Asian session on Tuesday. Any meaningful recovery, however, seems elusive in the wake of the underlying strong bullish sentiment surrounding the USD. Traders might also opt to wait on the sidelines ahead of this week’s release of the US consumer inflation figures and speeches by influential FOMC members, including Fed Chair Jerome Powell.