Gold prices consolidated around $1,860 on Tuesday after yesterday’s rout that took the bullion to the $1,850 area where mid-February lows arrive. The yellow metal derived support from this area last week, refraining from challenging a major local barrier for bears. However, it looks like the prices could see deeper losses before attracting robust demand.

The main reason behind a recent sell-off in the gold market was a broad-based rally in the US dollar. At the start of the week, the USD index briefly exceeded the 104.00 mark for the first time in twenty years, pressuring both riskier assets and the non-yielding precious metal. Now that the ascent in the buck has faded somehow, the XAU/USD pair came off the mentioned lows, albeit stays vulnerable to further losses in the near term.

Now, the market focus turns to Fed speakers as their rhetoric would set the tone for the greenback ahead of Wednesday’s US inflation data. Should the figures come in lower than expected, however, the dollar will retreat across the board as slowing growth in consumer prices would suggest the Federal Reserve may take a less hawkish tightening path in the coming quarters. In this scenario, gold will receive relief through a weaker USD.

Otherwise, the dollar would continue to refresh long-term tops, thus pressuring the bullion. Failure to hold above $1,850 in the days ahead would pave the way towards the 200-DMA, today at $1,835, last seen more than three months ago. On the upside, the immediate barrier now arrives at around $1,880, followed by the $1,900 figure.