Gold struggling to attract buyers despite the Fed’s aggressive posture and rising US bond yields.
The gold price (XAUUSD) oscillates in a range following the previous day’s late fall from the $2,665 resistance zone, as traders eagerly anticipate the FOMC meeting minutes. Aside from that, Wednesday’s release of the US ADP report on private-sector jobs and the customary Weekly Initial Jobless Claims should provide some traction. Meanwhile, a further rise in the US Treasury bond yields, supported by the The Federal Reserve’s (Fed) hawkish signal to slow rate cuts in 2025 is a headwind for the non-yielding yellow metal.
US dollar trade drop war fears and geopolitical uncertainties underpin the XAUUSD.
However, the US Dollar (USD) struggles to attract buyers and lends support to the gold price. Uncertainty surrounding US President-elect Donald Trump’s tariff plans, trade war fears, geopolitical tensions, and a softer risk tone should help limit the downside. The US Treasury bond yields and the US Dollar both rose on Tuesday as strong US data confirmed market expectations that the Federal Reserve will slow the pace of its rate-cutting cycle this year.
The Institute for Supply Management said that the Non-Manufacturing Purchasing Managers’ Index (PMI) increased to 54.1 in December, while the Prices Paid component reached a nearly two-year high.
Separately, the Job Openings and Labor Turnover Survey, or JOLTS report, showed that job openings unexpectedly increased to 8.098 million by the last day of November from the 7.839 million previous.
Investors are looking or major momentum from US macroeconomic data and FOMC meeting minutes.
The data pointed to a still resilient US economy and support prospects for fewer Fed rate cuts in 2025, lifting the yield on the benchmark 10-year US government bond to its highest Level since April.
Atlanta Fed President Raphael Bostic said the central bank should be cautious with policy decisions given the uneven success in decreasing inflation and err on the side of keeping interest rates high.
US President-elect Donald Trump has refuted a Washington Post report that his administration will adopt a less aggressive tariff policy and target sectors important to US national or economic security.
Trump hinted at military intervention if Israeli hostages held in Gaza not released before he takes office, raising the danger of additional geopolitical tensions in the Middle East.
Traders are now looking to Wednesday’s US economic docket, which includes the release of the ADP report on private-sector jobs and the customary Weekly Initial Jobless Claims, for short-term opportunities.
The attention, however, remains on the FOMC meeting minutes, which will have a significant impact on the USD price dynamics and provide a new push to the Gold price later in the US session.
