Gold Price Forecast: XAU/USD remains on the defensive near $1800 mark

Update: Gold struggled to capitalize on the previous day's post-US CPI strong move up from two-week lows and faced rejection near the very important 200-day SMA on Wednesday. The modest intraday pullback dragged the XAU/USD to fresh daily lows during the early European session, though lacked follow-through below the $1,800 mark. A positive risk tone, along with a modest uptick in the US Treasury bond yields, acted as a headwind for the non-yielding yellow metal, though a combination of factors helped limit the downside.

Tuesday's sofer-than-expected US consumer inflation figures eased fears for an earlier tapering by the Fed. Apart from this, worries about the fast-spreading Delta variant and a global economic slowdown extended some support to traditional safe-haven assets, including gold. The market concerns were further fueled by Wednesday's disappointing Chinese macro data, which underscored recent signs of slackening economic momentum in the world's second-largest economy. This, in turn, warrants some caution for bearish traders.

Previous update: Gold prices stall gains near $1,800 after hitting a one-week high on Tuesday. The drop in the US benchmark US Treasury yields supported the current upside movement in the prices the previous day. The movement was primarily sponsored after the softer-than-expected rise in US Inflation data revealed yesterday, which raised the doubts over the Fed’s timeline to taper monetary stimulus.