Gold price is struggling to attract buyers despite aggressive Fed views and an upbeat market environment.
The gold price (XAUUSD) has extended its consolidative range bound price action into the European session on Monday, and is now barely above the monthly low reached last week.
The uncertainty surrounding Fed rate cuts keeps USD bulls on the defensive and supports the metal.
Rising acceptance that the Federal Reserve (Fed) would keep interest rates higher for longer in the face of a still-resilient US economy supports increased US Treasury yields. This, alongside The underlying positive tone in the equities markets turns out to be a significant impediment for the safe-haven precious metal.
However, uncertainty about the timing and speed of the Fed’s interest rate decreases prevents the US Dollar (USD) from gaining significant traction and supports gold prices. Traders also appear hesitant to put strong wagers, preferring to await the release of the latest US consumer inflation numbers, which are anticipated on Tuesday, for clues about the Fed’s future policy moves. This will have a significant impact on near-term USD price dynamics, providing a new directional impulse to the non-yielding commodities.
Daily Market Movers: The gold price oscillates. in a range amid Fed rate cut uncertainty.
The growing belief that the Federal Reserve will maintain interest rates higher. For longer in the face of a still strong US economy acts as a drag on the non-yielding gold price.
Furthermore, recent hawkish remarks by a number of important FOMC members have prompted. Investors to lower their expectations for early and dramatic interest rate decreases this year.
Lorie Logan, President of the Dallas Fed Bank, stated on Friday. That there is no need to decrease interest rates. And that more evidence on inflation is needed to ensure. That improvement is sustainable.
Atlanta Fed President Raphael Bostic stated that inflation has been too high for too long. And that the US The economy is returning to pre pandemic levels.
The Labor Department’s yearly adjustments issued on Friday. Indicated that US consumer prices rose somewhat more than previously recorded in October and November.
However, the US Dollar is struggling to gain any real headway in the aftermath of uncertainties. Regarding the Fed’s probable timing and pace of interest rate decreases this year.
Traders are waiting for the US consumer inflation statistics on Tuesday before placing directional bets.
Traders also prefer to remain on the sidelines and await the next US consumer inflation statistics on Tuesday. For clues regarding the Fed’s rate-cutting plan before making directional bets.
Relatively low trading volumes as a result of holidays in Japan. And China add to the muted rangebound price action on the opening day of the new week.
The Israel The military announced on Monday. That it has completed a series of strikes in southern Gaza. Allaying fears that the Israel-Palestinian war would spread throughout the Middle East.
https://voiceoftraders.com/analysis/japanese-yen-remained-in-a-narrow-range-near-its-ytd-low
