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Gold Price Forecast: XAU/USD under pressure, sellers defend $2,000

  • The US Core Consumer Price Index held steady at 4% YoY in November.
  • The Federal Reserve will announce its decision on monetary policy on Wednesday.
  • XAU/USD is poised to extend its decline in the near term, caution prevails ahead of Fed.

Gold prices changed little on Tuesday, with XAU/USD hovering around $1,980.00. The US Dollar started the day with a soft tone, as the better performance of Asian equities pushed investors away from the safe-haven currency. Still, investors were cautious about placing bets ahead of the release of the United States (US) Consumer Price Index (CPI). The report came as expected, with the monthly CPI up 0.1% and the annual one at 3.1%, slightly lower than the previous 3.2%. Finally, the core annual gauge was 4%, matching expectations and the October reading.

XAU/USD posted an intraday high of $1,996.68 as an immediate reaction to the news, but the Greenback quickly changed course and trimmed inflation-inspired losses. Investors are trying to anticipate the Federal Reserve (Fed) monetary policy move. The central bank will make an announcement on Wednesday, and investors expect it to keep rates on hold for a third consecutive meeting. What investors are looking for is a clue on when policymakers will reverse massive hikes and start cutting rates and by how much throughout 2024. Steady inflation partially weighed on rate-cut odds, spurring some near-term concerns and benefiting the USD.

Read more: Fxstreet