Federal Reserve’s dovish hike, softer US Dollar defend XAU/USD bulls

Despite the recent hopes favoring the Gold price pullback ahead of the key data/events, the dovish Federal Reserve (Fed) interest rate hike and hopes of more problems for the US Dollar keep the XAU/USD buyers hopeful. That said, the US Treasury Secretary Janet Yellen on Sunday issued a stark warning that a failure by Congress to act on the debt ceiling could trigger a "constitutional crisis" that also would call into question the federal government's creditworthiness, per Reuters. On the same line, a leading European rating agency, Scope Ratings, placed the United States of America's AA long-term issuer and senior unsecured debt ratings in local and foreign currency under review for a possible downgrade due to longer-run risks associated with the misuse of the debt ceiling instrument, per Reuters.

Additionally, news that China’s central bank added to its Gold reserve for the sixth consecutive month in April to 66.76 million ounces (1,893 tons) also underpins the bullish bias about the XAU/USD.