Gold Price Forecast: XAU/USD pulls back to near $2,310 from the fresh highs

Gold price drops to near $2,310 per troy ounce during the Asian session on Monday after touching a new record high on Friday. The price of precious metal faces challenges primarily due to higher US Treasury yields, which weakens the non-yielding assets.

The recent gains in the US Dollar exert downward pressure on the price of Gold, making it more expensive for investors holding other currencies to purchase Gold. This decreases demand for the precious metal.

The US Dollar Index (DXY) trades higher around 104.40, with the 2-year and 10-year yields on US Treasury bonds standing at 4.77% and 4.42%, by the press time. The stronger Nonfarm Payrolls (NFP) report reinforces the bullish outlook for the Greenback. According to the CME FedWatch Tool, the likelihood of a rate cut in June from the Federal Reserve (Fed) has been depreciated to 46.1%.

US Nonfarm Payrolls (NFP) reported a significant increase of 303,000 jobs in March, surpassing expectations of 200,000. However, the previous growth of 275,000 was revised downward to 270,000.

Federal Reserve Bank of Dallas President Lorie K. Logan emphasized on Friday that, given the upside risks to inflation, she believes it is premature to consider cutting interest rates. She stressed the necessity of resolving more uncertainty regarding the economic trajectory before making such decisions. Logan also highlighted the importance of the Federal Open Market Committee (FOMC) to remain ready to respond appropriately if inflationary pressures cease to abate.