Gold price retraced on Friday as the US dollar recovered.
The gold price (XAUUSD) is trading with a bearish bias on Friday, having fallen below the almost $2,400 level.
The Federal Reserve’s cautious approach drags on the yellow metal.
The bullish surge in precious metals in recent sessions was boosted by softer-than-expected US inflation statistics in April, which raised hopes for rate reduction from the US Federal Reserve (Fed).
Gold dealers will be watching the Fed’s Kashkari, Waller, and Daly speeches on Friday.
However, the cautious approach taken by Fed officials on Thursday to keep borrowing prices high for longer signaled. That the US central bank is not in a hurry to decrease interest rates this. year. This, in turn, raises the US Dollar (USD) broadly while dragging the yellow metal lower. As higher interest rates may limit overall investment demand for non-yielding gold.
In the absence of top-tier economic data from the US docket. Market investors will focus on Fedspeak. Which may provide signals about the Fed’s future monetary policy course. Kashkari, Waller, and Daly are scheduled to speak later on Friday.
Daily Market Movers: Gold prices edge lower as Fed officials believe interest rates should remain higher for longer.
The US weekly Initial Jobless Claims increased by 222K from 232K the previous week. Exceeding the 220K estimate, according to the US Bureau of Labor Statistics (BLS). In April, housing starts increased by 5.7% month on month to 1.36 million. While building permits fell by 3% to 1.44 million.
Atlanta Fed President Raphael Bostic said he noticed evidence of lowering inflation in the most recent CPI report, but he prefers to watch the May and June statistics to ensure that inflation does not reverse.
Loretta Mester, President of the Cleveland Fed, stated that policy was well positioned and that progress on inflation had not yet slowed.
Richmond Fed President Tom Barkin stated that the central bank must keep borrowing costs high for an extended period of time to ensure that inflation remains on pace to meet its objective, citing higher service sector pricing.
The financial markets are currently pricing in nearly 75%.The probability of a Fed rate cut in September have increased from 65% earlier this week. The markets are also pricing in full 25 basis point (bps) rate reduction before the end of the year, according to the CME FedWatch tool.
