On a different page, the recent hike in coronavirus (COVID-19) cases in Victoria keeps weighing on the market trading mood, which may help to limit losses for the safe-haven metal. Another factor that capped the declines in the gold prices was the reaction to US Secretary of State Antony Blinken’s recent comments, in which he held China responsible for the origins of the COVID-19 virus. Meanwhile, the latest chatter over the UK’s support to Australia in its trade complaint against China put some additional downside pressure on the market trading sentiment, which was seen as one of the key factors that kept a lid on any additional losses in the GOLD prices. At the time of writing, the yellow metal prices were trading at 1,886.01, and consolidating in the range between 1,884.68 and 1,891.86.

On the USD front, the broad-based US dollar succeeded in stopping its declining streak of earlier in the day, taking some fresh bids as the market risk-off mood tends to underpin the safe-haven assets, including the US dollar. In addition to this, another reason for the bullish US dollar could also be associated with the previously released upbeat critical US economic data, which showed continued progress in terms of the US labor market. Conversely, the gains in the US dollar could be short-lived, as the market uncertainty over the Fed’s next move tends to confuse market players. Therefore, the prevalent upticks in the US dollar have become a key factor that has kept the price of the precious metal lower, due to its inverse relationship with the US dollar.

Traders will keep their eyes on the consumer price index (CPI) figures, which are due later in the week. The data could influence the Fed’s next move, as it provides a further measure of current price pressures. A lower-than-expected figure will push the US currency down. Traders are also awaiting the European Central Bank’s (ECB) latest policy decision, which is due to be released on Thursday.