GOLD PRICE REBOUNDS AMID FED RATE CUT SPECULATION AS US INFLATION CONCERNS ARE RESURRECTED

• Gold recovers, reflecting optimism for potential Fed rate cuts despite a recent surge in inflation.
• US economic resilience and inflation above 3.2% pose challenges to immediate easing of Fed monetary policy.
• Powell's cautious stance on easing, tied to disinflation evidence, keeps investors on edge as Treasury yields rise.

Gold prices recovered on Wednesday after a pullback to the $2,150.00 region, and traders seem convinced that the US Federal Reserve (Fed) could cut borrowing costs. Nevertheless, the latest hotter-than-expected inflation report in the United States might deter Fed officials from easing policy in June, contradicting market participants' speculation. Therefore, the XAU/USD trades at $2,173.60, gaining 0.7%.

The latest US economic data suggests the economy remains robust, even though the labor market is cooling. Nevertheless, headline and underlying inflation remaining above 3.2% in the twelve months to February might push back some Fed officials’ intentions to cut borrowing costs.

Last week, US Federal Reserve Chair Jerome Powell said the central bank is ready to ease policy if conditions are met and the disinflation process continues. He emphasized that they are data-dependent, in no rush to begin the trimming cycle, and would like to see more evidence of the evolution of the disinflation process.

In the meantime, the yellow metal stays in the green even though the US 10-year Treasury bond yield rose three-and-a-half basis points from 4.157% to 4.19%.