Gold trades with a modest downward tilt remains above $2,900 ahead of FOMC minutes.
Gold price (XAUUSD) declines from the vicinity of the all-time high, but it remains comfortably over $2,900 through the Asian session on Wednesday. A broadly optimistic risk tone encourages some profit-taking around the safe-haven precious metal, as traders reposition ahead of the FOMC meeting minutes. Investors will search for new clues concerning the Federal Reserve’s (Fed) rate-cutting course This, in turn, will boost the US Dollar (USD) and provide new impetus to the non-yielding yellow metal.
Concerns over Trump’s tariff proposals and trade war fears boost the commodity.
The rising consensus that the Fed will lower interest rates further puts USD bulls on the defensive and acts as a tailwind for the gold price. Aside from that, the uncertainty surrounding US President Donald Trump’s tariff plans, which might spark a global trade war, may further restrict any substantial corrective dip in bullion. As a result, it is wise to wait for strong follow-through selling before concluding that the XAUUSD pair has topped out and putting aggressive bearish bets.
Daily Market Update: Gold price hampered by positive risk tone amid some repositioning ahead of the FOMC minutes.
The optimism regarding a The delay in implementing US President Donald Trump’s reciprocal tariffs, as well as discussions aimed at ending the protracted Russia-Ukraine war, triggered some profit-taking around the gold market on Wednesday.
Investors remain concerned about a potential increase in global trade hostilities as a result of Trump’s protectionist policies. This, combined with speculations on future Fed policy easing, boosts safe-haven bullion prices.
The dismal publication of US retail sales data on Friday, combined with contradictory inflation signals, suggests that the US central bank may decrease interest rates at its September or October monetary policy meeting.
In fact, Fed Funds Futures anticipate a 40 basis point rate drop by the end of this year. This holds the lid on The US dollar (USD) has recovered from a two-month low, which could support the XAU/USD.
San Francisco Fed President Mary Daly said on Tuesday that the US central bank should leave short-term borrowing prices unchanged until progress toward the 2% inflation objective becomes more obvious.
As a result, the market will stay focused on the release of the Fed’s January meeting minutes, which will be scrutinized for signals regarding the central bank’s interest rate path and impact on the non-yielding yellow metal.
