Gold Price Analysis: XAU/USD drops below $1,730 amid higher US Treasury yields, ahead of CPI

Gold extends decline for the second straight session in the European session. The price refreshes the swing lows near the $1,722 region and maintains downside bias against the US dollar. 

At the time of writing, XAU/USD  is trading at $1,728.15, down 0.26% on the day.

The US dollar index (DXY) recovers swiftly from the intraday lows around the 92.10 level and is pushing XAU/USD into the lower territory. The upbeat US economic outlook continues to underpin demand for the US dollar. 

The sudden revival in the US 10-year yield boosted the performance of the greenback against the majors as well as commodities. Prospects of a higher inflation scenario, against the backdrop of heightened government spending in a move to boost the economy coupled with a faster vaccination rollout, are attracting investors' attention toward the buck as an attractive investment instrument.

Investors are now focused on the growth aspects of the market and shrugging off the fear of inflation, the assessment weighing negatively on the non-yielding asset.

Moving forward, US CPI data later in the day could provide a dictate on the direction of the price for gold. Investors seem comfortable negating the effects of rising prices in the bargain of higher growth and valuation in riskier assets.

Gold: Additional levels to consider