Gold fallen slightly as the minutes of the FOMC meeting had a more hawkish tone.
The gold price (XAUUSD) extends the overnight moderate drop from the $2,007 range, or around a multi-month high. And remains below the $2,000 psychological level through the Asian session on Wednesday. The minutes of the Federal Reserve’s most recent policy meeting, conducted on October 31-November 1. Struck a hawkish tone, revealing that officials are still committed to tightening policy. Further if progress in managing inflation stalls. This, in turn, is observed. As a primary driver directing flows away from the non-yielding yellow metal.
Policymakers, on the other hand, stated that they were not in a hurry to raise interest rates again. Supporting views that the Fed had hit its interest rate peak. Furthermore, markets are still pricing in the likelihood that the Fed may begin decreasing rates as early as next year’s policy meeting on April 30-May 1. This makes it difficult for the US Dollar (USD) to capitalize on the overnight upward comeback. From its lowest level since August 31, which should help the Gold price. As a result, it is recommended to wait for strong follow-through selling before preparing for more declines.
Daily Market Movers: The gold price is under pressure as a result of the hawkish FOMC meeting minutes released on Tuesday.
The minutes of the Federal Reserve’s most recent meeting revealed officials supporting higher interest rates. For a longer period of time to manage inflation and undercut the gold price.
Market investors, on the other hand, appear certain that the US central bank would maintain rates rather than raise them. And they are pricing in the prospect of rate reduction by spring 2024.
Price activity in the US Dollar could provide some support and assist limit additional losses.
The benchmark 10-year US Treasury bond yield is around a two-month low and is failing to help the US Dollar (USD) recover from a multi-month low.
According to the National Association of Realtors, existing home sales in the United States decreased in October to a seasonally adjusted annual rate of 3.79 million units, the lowest level in more than 13 years.
Israel and Hamas have reached an agreement. In exchange for Palestinian prisoners and a four-day cease-fire, for the staggered release of 50 people held captive in Gaza.
In response to attacks on US and Coalition forces by Iran and Iran-backed groups, the US military conducted discrete, precision strikes against two Iran-backed installations in Iraq.
The markets reacted little to the recent development because there hasn’t been any significant escalation in Middle East hostilities, which has had little impact on the safe-haven precious metal.
Traders are now looking for short-term momentum in the form of US macro data such as Initial Weekly Jobless Claims, Durable Goods Orders, and the updated Michigan Consumer Sentiment Index.
