US inflation expectations, as measured by the 10-year breakeven inflation rate, per the St. Louis Federal Reserve (FRED) data, eased from the two-week top on Friday. In doing so, the risk barometer fades late June’s recovery moves, suggesting further hardships for the traders to predict the market sentiment.
The drop in inflation expectations could be linked to the latest US jobs report that flashed mixed data and pushed back the hopes of the Fed’s monetary policy adjustments. However, a reassessment of the same keeps bulls hopeful.
It’s worth noting that the US 10-year Treasury yields followed the inflation expectations the previous day while flashing 4.9 basis points (bps) of a downside to 1.43%.
While the downtick of the inflation expectations seems to trouble the gold buyers, the overall optimism concerning the price pressure in the US may keep the Fed rate hike expectations on the table.
Read: Gold Price Forecast: XAU/USD tracks mildly offered S&P 500 Futures below $1,800
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