[MARKET UPDATE] Spot gold resumes downside, USD rises as US traders arrive

• Gold has been under pressure (albeit paring losses throughout the European morning) while USD has regained poise; traders have cited articles over the weekend that suggest incoming Fed chief Warsh is hawkish on the Fed balance sheet.
• Others have suggested that his appointment helps to restore US policy credibility, amid some recent concerns of USD debasement due to US government pressure on the Fed to pursue lower rates despite inflation above target and growth metrics running at a solid pace.

The renewed strength in the USD, alongside the pressure on gold prices, indicates a market responding to hawkish sentiments around the Federal Reserve's stance, particularly regarding the balance sheet under incoming Fed chief Warsh. This shift could signal a reinvigoration of dollar credibility and policy integrity, suggesting the market may already be positioning for tighter monetary conditions despite existing inflationary pressures.