Ella 
Gold prices took a sharp turn lower during the session on Monday, retreating nearly $125 after initially rallying to record highs near $2,144-$2,145. However, gold prices have retreated sharply to around $2020 as more and more people believe that U.S. interest rates have peaked. Additionally, markets have been betting that the Fed will eventually take a dovish stance, with a rate cut by March 2024 becoming more likely.
At the same time, the Federal Reserve’s dovish expectations triggered a new round of declines in U.S. bond yields, which failed to boost the dollar to extend the previous day’s strong rise to a more than one-week high. This is therefore seen as a key factor affecting zero-yield gold prices. In addition to this, escalating geopolitical tensions in the Middle East and China’s economic woes also pushed the safe-haven precious metal back towards the $2,035 zone in Asia on Tuesday.
However, it remains to be seen whether gold prices can capitalize on the modest intraday gains, as traders may prefer to stay on the sidelines and avoid making new directional bets ahead of key U.S. macro data this week. The U.S. ISM Services Purchasing Managers Index and JOLTS job vacancy data will be released later on Tuesday. This will be followed by the ADP private sector employment report, followed by the much-anticipated non-farm payrolls (NFP) data on Friday.
