Although investors are skeptical about any immediate breakthroughs, renewed dialogue provides a mild risk-off tone. Treasury yields eased slightly ahead of the meeting, with the 10-year yield down to 4.504% and the 2-year at 4.02%, providing further support for gold prices.
China’s Central Bank Adds Gold for Seventh Straight Month
In another bullish development, China’s central bank added gold to its reserves in May for the seventh consecutive month, signaling ongoing institutional demand. This trend reflects continued diversification away from dollar-based assets and reaffirms gold’s appeal during geopolitical and financial stress.
Gold Prices Forecast: CPI and Fed Rate Outlook to Drive Near-Term Direction
While support from a weaker dollar and geopolitical concerns remain intact, gold’s immediate direction hinges on upcoming U.S. inflation data. Traders will scrutinize May’s CPI print on Wednesday for evidence of tariff-related price pressures and clues on the Fed’s next move. The central bank remains in a pre-meeting blackout, but market pricing now reflects reduced expectations for rate cuts this year — from two to one, likely in October.
Unless gold decisively breaks above $3403.63, the market remains vulnerable to selling pressure. A failure to hold the 50-day moving average near $3265 could trigger accelerated downside. For now, the outlook leans bearish unless buyers reclaim control above key resistance.
