• Gold price jumps higher as expectations that the Fed will cut interest rates in June remain firm.
• The Fed appears to be confident that inflation is easing toward the 2% target.
• Investors await the US core PCE inflation for fresh guidance.

Gold price (XAU/USD) soars to $2,200 in Wednesday’s European session amid multiple tailwinds. The main driver is that expectations for the Federal Reserve (Fed) reducing interest rates from the June meeting remain firm. These expectations, which also price in two more cuts by the end of the year, have strengthened the appeal of Gold. 

On Monday, Chicago Fed Bank President Austan Goolsbee cautioned that the inflation outlook is uncertain due to higher housing inflation. However, he remained confident that the fundamental story of inflation returning to the 2% target has not changed.

Firm market expectations for the Fed cutting rates in June have supported Gold prices as it lower the opportunity cost of investing in it. Meanwhile, 10-year US Treasury yields are slightly up at 4.24% but remain inside Tuesday’s trading range as investors await the crucial United States core Personal Consumption Expenditure (PCE) price index for February, which will be published on Friday. The underlying inflation data will significantly influence Gold prices as it will provide some clues over the time frame in which the Fed intends to start cutting interest rates.

The US Dollar Index (DXY), which measures Greenback’s value against six major currencies, retreats slightly from 104.40.