Ella 
Gold prices (XAU/USD) extended gains for a second straight session, trading around $2,400 an ounce during European trading on Monday. U.S. personal consumption expenditures (PCE) price index data released last Friday showed a modest rise in inflation in June, increasing bets that the Federal Reserve (Fed) is about to begin an interest rate cut cycle. This has led to further declines in U.S. Treasury yields, which in turn has put U.S. dollar (USD) bulls on the defensive and acted as a tailwind for non-yielding gold.
In addition, geopolitical risks caused by conflicts in the Middle East have also provided additional support for safe-haven gold prices. However, upside remains limited due to optimism in global equity markets, which tends to weaken demand for the traditional safe-haven gold/dollar. Traders also preferred to await the outcome of Wednesday’s two-day Federal Open Market Committee (FOMC) meeting. This, along with key U.S. macro data due to be released early this month, including the non-farm payrolls report, will provide fresh impetus for the commodity.
