Gold price fell as the US dollar rebounded.
On Tuesday, the gold price (XAUUSD) lost its rebound momentum after reaching a record high earlier. The dearth of new triggers in a quiet session for top-tier economic news may limit the precious metal’s rise. Nonetheless, fresh demand by higher wagers on interest rate cuts from the US Federal Reserve (Fed), persistent geopolitical concerns, and robust demand originating from central banks and Asian purchasers may Provide some support for the yellow metal.
The hope for Fed rate reduction, increased geopolitical uncertainties, and solid gold demand may limit the yellow metal’s downside.
Gold traders will take more signals from Fedspeak, as Waller, Williams, Barr, Bostic, Collins, and Mester are slated to speak later Tuesday. The FOMC Minutes will be the centerpiece of Wednesday. Furthermore, Fed policymakers’ hawkish approach is likely to boost the greenback while dragging the USD-denominated gold lower.
Daily Market Movers: Gold prices struggle to gain ground despite USD recovery.
Gold reached a new high of $2,450 on Monday, while silver prices approached 12-year highs. Gold has surged 18% this year, while silver has increased by 35%.
Fed Vice Chair Michael Barr stated that the central bank “will need to allow our restrictive policy some additional time to continue doing “It is work.”
Fed policymaker Philip Jefferson, another permanent voting member of the Fed’s rate-setting committee, said inflation was still falling, but not as swiftly as he expected.
Atlanta Fed President Raphael Bostic stated that policy is restrictive and that it will take some time before the central bank is confident that inflation will reach 2%.
According to the CME FedWatch Tool, investors expect the Fed to lower rates by 25 basis points (bps) in September and again by the end of the year, for a 76% chance.
