• Gold price hovers below $2,450 after profit-booking but holds ground on multiple tailwinds.
• The Fed is expected to cut interest rates by more than 100 bps this year.
• The US Dollar falls near the March bottom, and bond yields post fresh annual lows.

Gold price (XAU/USD) recovers above $2,440 after declining to near $2,410 in Monday’s European session. The precious metal faced selling pressure as profit booking kicked in while attempting to recapture all-time highs above $2,480. The overall outlook of the Gold price remains firm as US bond yields post fresh annual lows.

10-year US Treasury yields plunge to 3.67% as speculation for rate cuts by the Federal Reserve (Fed) in September seems certain. Lower yields on interest-bearing assets reduce the opportunity cost of holding an investment in non-yielding assets, such as Gold. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, plummets to the March low near 102.60.

According to the CME FedWatch tool, 30-day Federal Funds futures pricing data shows that traders see a 50-basis point (bp) cut in interest rates in September as imminent. The data also shows that the Fed is expected to reduce its key borrowing rates by more than 100 bps this year.