Gold price recovered as the FOMC minutes have increased the likelihood of rate cuts this year.

Following the release of the Federal Open Market Committee (FOMC) minutes. The Federal Reserve’s (Fed) likelihood of cutting interest rates has increased leading to a rebound in the price of gold (XAUUSD).

The wider attractiveness of the gold price has been impacted by the uncertainty around the precise timing of the Fed’s announcement of a rate cut.

The timing of the Fed’s rate decreases continues to worry market players.

In the meantime, optimistic outlooks for the US economy may compel Fed officials to postpone the release of a rate. Reduction in spite of market investors’ worries about an excessive tightening of policy.

Moreover a significant increase in the Manufacturing PMI to 47.4. Against predictions of 47.1. And the previous reading of 46.7, was released by the US Institute of Supply Management (ISM). However, for the fourteenth consecutive month. The factory statistics stayed below the 50.0 criterion, indicating contraction.

However, an outperformance suggests. That overall production is beginning to return to its previous level.

The US Employment Report will direct future billion and US dollar trading.

Investors should brace themselves for extreme volatility going forward. As the US Nonfarm Payrolls (NFP) report is scheduled for release on Friday.

Daily Market Movers: The US dollar corrects and the gold price pulls back.

The price of gold increases as purchasing demand near $2,030 is detected. And the uncertainty surrounding rate cuts this year fades. The time component is still unclear.

Fed members are concerned about tightening monetary policy too much. According to the FOMC minutes that were made public on Wednesday.

Furthermore According to the Fed’s most recent predictions. This year will see three rate cuts, or a 75 basis point (bps) drop in interest rates.

The likelihood of interest rate reductions starting in March has been somewhat hampered by the lack of indications on the precise timing of the central bank’s rate cuts.

The likelihood of a rate cut in March by 25 basis points, to 5.00–5.25%, has decreased to 66.5%, according to the CME Fedwatch tool.

Policymakers at the Fed feel confident in reaching price stability without driving the economy into a recession. As evidenced by their discussions on rate decreases. Which show that underlying price pressures are clearly returning to the 2% target.

After hitting a new two-week high at 102.70. The US Dollar Index corrects as investors realize that the Fed will be the first of the Group of Seven economies to implement a cycle of rate reductions. The US Treasury yield on the 10-year note plunges to around 3.91%.

However, given the uncertainties surrounding the US NFP report. And the ISM Services PMI for December. Which are all due out on Friday the market attitude could be erratic going forward.

Prior to that, though, investors will be concentrating on the US Automatic Data Processing (ADP) Employment Change data for December. Which is scheduled for release at thirteen fifteen GMT. Private payrolls are expected by market participants to be 115K. Marginally higher than the previous number of 103K.