Federal Reserve rate hike bets cap gains for Gold price

In fact, the Organization of the Petroleum Exporting Countries and their allies - known as OPEC - shook markets by announcing further production cuts of about 1.16 million barrels per day (bpd) on Sunday. This leads to a big bullish gap opening in Oil prices, reviving inflation fears and fueling speculations about further policy tightening by the Fed. The current market pricing indicates a greater chance of a 25 bps lift-off at the next Federal Open Market Committee (FOMC) monetary policy meeting in May. This, in turn, pushes the US Treasury bond yields higher, which could act as a tailwind for the Greenback and might hold back traders from placing aggressive bullish bets around the non-yielding Gold price, at least for now.

Trades look to key macro data from United States for fresh impetus

Market participants now look forward to important US macro data, scheduled at the beginning of a new month for some meaningful impetus. A rather busy week starts with the US ISM Manufacturing PMI, due later during the early North American session on Monday, which, along with the US bond yields, could drive the USD demand and allow traders to grab short-term opportunities around Gold price. Investors will further take cues from the ADP report on private-sector employment and ISM Services PMI on Wednesday, followed by the crucial US monthly employment report - popularly known as NFP on Friday. The latter will influence the near-term USD price dynamics and help determine the next leg of a directional move for the XAU/USD.