Gold prices climbed to an all-time high of $11834, as Fed Chairman Jerome Powell gave a dovish forward direction to US lawmakers. However, swings in risk sentiment could influence bullion in the coming days as Fed enters the quiet period' before the July 28 interest rate decision.

Fundamental Forecast for Gold

The price of gold seems to be moving in accordance with its own rhythm as bullion has lost its inverse relationship to US Treasury yields. It remains to be seen how the US data prints will impact the precious metal, as the economic docket is still light for the week ahead.

The US housing data might not be enough to change the Federal Open Market Committee (FOMC). Minutes from the June meeting stated that "the Committee's standard for "substantial further progress" was generally not being met. It appears as though the central bank will continue to pursue its current course of monetary policy. Participants agreed to continue assessing how the economy is progressing toward the Committees goals and to start discussing their plans to adjust the path and composition for asset purchases.

While the wait-and-see approach to monetary policy may keep gold prices afloat while Chairman Powell and Co. prepare for a temporary rise in inflation, a growing number Fed officials may shift their tone in the coming months. James Bullard, the Louis Fed President, votes on the FOMC for 2022 and insists that it is time to end "these emergency measures."

With this in mind, the price for gold could continue to move according to its own rhythm as the US data prints and swings of risk sentiment may have an impact on bullion ahead the Fed rate decision.