US Dollar Index breaks below 107 and remains under bearish pressure.
Gold (XAU) prices dropped on Tuesday as traders booked profits amid declining US Treasury yields. The US dollar also weakened due to uncertainty over President Trump's shifting trade policies. Concerns over Trump's tariff threats against Mexico and Canada have added to risk aversion. Meanwhile, weak consumer confidence data from the Conference Board reflected growing economic pessimism, as shown in the chart below. This, combined with rising layoffs of federal workers, further fueled fears of a potential stagflationary scenario. Last week, the University of Michigan's Consumer Sentiment data reinforced these concerns, further weighing on market sentiment.