Gold Price: XAU/USD recovers above $2,550 as US Dollar enters consolidation mode

LONDON (November 17) The Gold price (XAU/USD) rebounds to near $2,570, snapping the six-day losing streak during the early Asian trading hours on Monday. However, the strength of the US Dollar (USD) might cap the upside for the precious metal. 

The Greenback rally in the wake of Donald Trump's election win could exert some selling pressure on the USD-denominated Gold price. The expectations of higher inflation next year due to Donald Trump’s policies have led to fewer expected rate cuts. 

Furthermore, traders pared back expectations for lower rates in December after Fed Chair Jerome Powell said that the US central bank would be in no rush to cut, citing the “remarkably good” performance of the economy. Higher interest rates generally drag the Gold price lower, as it makes holding non-yielding assets like gold less appealing.

On the other hand, the rising geopolitical tensions in the Middle East and the ongoing conflict between Ukraine and Russia could boost the safe-haven flows, benefiting the yellow metal. President Joe Biden's administration has allowed Ukraine to use US arms to strike inside Russia in a significant reversal of Washington's policy in the Ukraine-Russia conflict, per Reuters. 

FXStreet