• Gold price hovers around $2,180.60, steadying as traders anticipate February's CPI release.

• Core inflation expectations set to influence the US Dollar and potentially bolster Gold's position.

• Following Powell's testimony, Gold’s near breakthrough to $2,200 underlined XAU’s price sensitivity to Fed policy and inflation trends.

Gold prices remained virtually unchanged late in the North American session as traders prepared for the release of February’s US Consumer Price Index (CPI) data. The headline figures are estimated to remain unchanged, while core data is expected to show signs of cooling. Such a scenario could weigh on the US Dollar and potentially boost XAU/USD. As of now, Gold is trading at $2,180.60, reflecting a nearly flat movement.

Last week, Gold prices hit an all-time high of $2,195.15, just short of breaking the $2,200 mark. This followed US Federal Reserve (Fed) Chair Jerome Powell's testimony before the US Congress, where he acknowledged a downward trend in inflation. Powell indicated that the Fed would eventually begin to ease policy but stressed that the central bank remains data-dependent. Despite suggesting that the Fed is growing more confident that inflation is declining, Powell emphasized that there is no immediate rush to cut borrowing costs.

The anticipated CPI data release and Powell's recent comments highlight the delicate balance Gold prices maintain concerning inflation trends and Fed policy decisions. Traders will closely watch these economic indicators to gauge the future direction of Gold prices.

Daily Digest Market Movers:

Gold's Recent Movement:

Gold's latest rise was driven by weaker-than-expected US Non-Farm Payroll (NFP) data. Despite showing solid gains in February, the data revealed downward revisions for January, resulting in a net job loss of 167,000 compared to initial estimates. This has influenced interest rate futures traders' expectations.

Interest Rate Expectations:

According to the CME FedWatch Tool, the likelihood of a rate cut in May remains low at 22%, but the probability increases to 69% for June. This suggests that traders are anticipating potential rate cuts later in the year.

US CPI and Core CPI Expectations:

- February's US CPI is expected to rise from 0.3% to 0.4% month-over-month (MoM) and remain unchanged at 3.1% year-over-year (YoY).

- Core CPI is estimated to drop from 0.4% to 0.3% MoM and from 3.9% to 3.7% YoY.

Federal Reserve's Stance:

Federal Reserve officials have emphasized their data-dependent approach, aiming to ensure inflation is on a sustainable path towards the Fed's 2% goal. Consequently, the upcoming inflation report on Tuesday is crucial, as a rise in prices could significantly impact Gold (XAU/USD) prices.

Impact of US Treasury Bond Yields:

Gold (XAU/USD) faces pressure from recovering US Treasury bond yields. The 10-year benchmark note rate recently gained two basis points, reaching 4.094%. This increase in bond yields can limit Gold's upward movement, as higher yields typically reduce the appeal of non-interest-bearing assets like Gold.

At present, Gold is trading at $2,180.60, with market participants closely monitoring economic indicators and the Federal Reserve's policy stance for future price movements.