Gold prices fell for the second consecutive trading session, erasing gains made on the first trading day of the year. Investor sentiment remains dominated by expectations of a more hawkish Federal Reserve, which will likely keep interest rates elevated for an extended period. This outlook has pushed Treasury yields higher, weighing on the price of the non-yielding precious metal. At the same time, an improvement in risk appetite, evidenced by gains in major stock indexes, has diverted investor flows away from gold. Nonetheless, the downside for bullion appears capped by persistent geopolitical uncertainties and concerns that the incoming US administration’s policies could ignite a trade war – scenarios that continue to support demand for the haven asset.
Source: ActivTrader
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