Focus remains on US consumer inflation and FOMC minutes

The crucial US Consumer Price Index (CPI) report will play a key role in influencing market expectations about the next policy move by the Fed. Furthermore, the Fed minutes will provide insight into how policymakers evaluated the need for higher rates despite the turmoil in the banking sector. This, in turn, should help investors to determine the near-term trajectory for the US Dollar (USD) and provide a fresh directional impetus to the non-yielding Gold price.

Recession fears act as a tailwind for Gold price

In the meantime, worries about a deeper global economic downturn, along with heightened US-China tensions over Taiwan, lend some support to the safe-haven XAU/USD. In fact, the International Monetary Fund (IMF) on Tuesday trimmed its 2023 global growth outlook, citing the impact of higher interest rates and fueling recession fears. Furthermore, Minneapolis Fed President Neel Kashkari warned that tightening credit conditions could lead to a recession.