Gold Price Forecast: XAU/USD trades higher around $1,895, snaps four week losing streak

• Gold price trades slightly higher in the face of elevated US yields.
• Inflation concerns could undermine the yellow metal.
• Traders await Powell's speech, seeking new insight into the Fed policy.

Gold price struggles to continue the previous day's snap, hovering around $1,895 during the Asian session on Tuesday. The XAU/USD pair could snap the four-week losing streak due to the retreating US Dollar (USD). However, Gold sellers remain cautious due to factors such as increased risk aversion in the market, the elevated United States (US) Treasury yields, and China’s economic challenges. These factors have the potential to counterbalance the effect of the Greenback's decline and influence the price action of Gold prices.

The price of Gold could experience downward pressure due to the cautious market sentiment on the inflation outlook. Investors expect a 25 basis points (bps) interest rate hike in September’s meeting by US Federal Reserve (Fed). The yellow metal price could face a challenge as the upbeat US economic data lead to hawkish sentiment among US Dollar (USD) buyers.

Investors sentiment could be heavily influenced by China’s economic woes. The disappointing Loan Prime Rate (LPR) was cut by 10 bps instead of expectations of 15 bps by the People’s Bank of China (PBoC), suggesting that China may focus on supporting the existing borrowers rather than encouraging credit growth – UBS

The US Dollar Index (DXY), which measures the performance of the Greenback against the six major currencies, trades lower around 103.20. The US Dollar (USD) declines despite strong US data and elevated US bond yields, prompting a sense of caution in the market as it seeks further signals about the inflation scenario.

Fed Chair Jerome Powell's speech on Friday during the Jackson Hole Symposium is the key centric event as it could offer valuable insight into the condition of the US economy. This could contribute to the shape of potential strategies for making fresh investments in non-yielding Gold. The US docket has  Existing Home Sales Change (MoM) for July to release later in the North American session.