• Gold price climbs above $2,120 as investors expect that the Fed will cut interest rates in June.
• The US Dollar remains on the back foot ahead of Fed Powell’s testimony, NFP data.
• Fed Powell’s guidance on interest rates will influence market expectations for rate cuts in June.

Gold price (XAU/USD) continues its winning spell for the fifth trading session on Tuesday. The precious metal refreshes a three-month high, approaching its all-time high of around $2,145 seen in December 2023. Gold’s advance happens amid a cautious market sentiment and increased bets that the Federal Reserve (Fed) will cut interest rates in the June policy meeting. 

The outlook for Gold price remains uncertain as investors await Fed Chair Jerome Powell’s testimony before Congress on Wednesday and a slew of labor market data from the United States, such as JOLTS Job Openings for January and ADP Employment Change data, which will be announced on Wednesday. 

The commentary from Jerome Powell on the inflation and the interest rate outlook could trim uncertainty associated with the timing of the Fed’s rate cuts. A hawkish guidance on interest rates could weigh on Gold as it will increase the holding cost of investment in non-yielding assets.

Later this week, the US Nonfarm Payrolls (NFP) for February will provide fresh cues on labor demand and wage growth. Apart from keeping inflation under control, reaching maximum employment is a key mandate for Fed policymakers when deciding on interest rates.