Gold price continues to consolidate throughout the Asian session.
On Tuesday, the gold price (XAUUSD) oscillated between modest gains and slight losses, consolidating its significant rebound gains from the $1,810 region, or a seven-month low reached last week. The precious metal, on the other hand, manages to maintain above the $1,850 mark and extends its sideways price movement throughout Wednesday’s Asian session.
Traders appear to be hesitant to initiate strong directional bets around the Gold price, preferring to wait for new clues. The FOMC minutes should provide some energy ahead of Thursday’s US CPI.
Daily Market Movers: Gold price is struggling to gather traction.
Reduced expectations on more Federal Reserve interest rate rises and geopolitical uncertainties in the Middle East continue to bolster the gold price.
Atlanta Fed President Raphael Bostic stated on Tuesday that the US central bank does not need to raise interest rates any more to achieve the 2% inflation objective.
Minneapolis Fed President Neel Kashkari also stated that the recent spike in long-term Treasury bond rates may help the central bank fight inflation.
The repricing of the Fed’s rate-hike plan causes a further decrease in US bond rates and continues to weigh on the market. the US Dollar (USD), which benefits the XAU/USD.
The spread of the Israel-Gaza war to the rest of the Middle East would raise crude oil prices and hinder the Fed’s efforts to curb inflation.
This might push the US central bank to maintain its hawkish posture, adding another layer of complication and making a smooth landing more difficult.
The Fed’s Daly stated that the central bank still has work to do and that inflation remains high, keeping the door open for more policy tightening before the end of the year.
Investors are now looking to the US PPI and FOMC minutes.
Investors are now looking to the US PPI and FOMC minutes for clues regarding the Fed’s potential rate-hike path ahead of Thursday’s consumer inflation readings.
