Gold price attracts some sellers afteold price fell slightly as the US dollar recovered modestly.
On Wednesday, the gold price (XAUUSD) broke its three-day winning streak as the US dollar recovered somewhat.
The Fed’s hawkish statements and improved US data bolster the dollar, dragging on the precious metal.
Furthermore, hawkish remarks from some Federal Reserve (Fed) officials, as well as stronger-than-expected US economic data, cast doubt on the Fed’s decision to cut rates in September. This, in turn, strengthens the US Dollar (USD) and puts pressure on the USD-denominated gold price. Geopolitical tensions and uncertainty, on the other hand, may fuel demand for safe-haven assets, including gold. The Growing central bank demand will continue to support higher gold prices in the short term.
Gold dealers will watch the Fed’s Beige Book and John Williams’ address later on Wednesday.
Gold dealers will keep a watch on the Fed’s Beige Book and John Williams’ address on Wednesday. The US Core Personal Consumption Expenditures Price Index (Core PCE) is expected to rise 0.3% month on month and 2.8% year on year in April. Any hints of increased inflation in the United States could postpone the Fed rate cut, putting some selling pressure on the yellow metal because higher interest rates boost gold’s opportunity costs.
Daily Market movers: The gold price faces some pressure from the Fed’s aggressive remarks.
Israel’s Prime Minister Benjamin Netanyahu promised to continue the war against Hamas notwithstanding international condemnation of an air attack that killed at least 45 people in Rafah on Sunday, according to the BBC.
The World Gold Council announced that worldwide physically-backed gold exchange-traded funds (ETFs) experienced a net outflow of 11.3 metric tonnes last week.
UBS analysts estimate gold prices to reach $2,500 per ounce by September and $2,600 per ounce by the end of the year. The projection exceeds the initial estimates of $2,400 and $2,500 per ounce, respectively.
The Conference Board announced on Tuesday that consumer confidence improved marginally in May. The figure increased to 102.0 in May from 97.0 in April, exceeding expectations of 95.9.
Fed Governor Michelle Bowman stated on Tuesday that she would have supported any waiting begin decreasing the quantitative tightening pace, or a more gradual tapering approach than announced earlier this month.
Fed Minneapolis President Neel Kashkari stated that the central bank should wait for strong improvement in inflation before decreasing interest rates, and that he predicted no more than two rate cuts in 2024.
