After hitting the $1,900 level on Tuesday, the price of gold is still within its previous range.
gold (XAUUSD) is floating aimlessly without a clear directional trend. As investors remain positioned in light of the critical US Fed decision on Wednesday
The US Federal Reserve is planning to raise rates by 25 basis points, but Jerome Powell is the key.
In the face of low US Treasury bond rates and cautious markets, the United States Dollar (USD) is having a difficult time getting started. A fresh batch of American economic data will also offer some incentives to gold traders before to the Fed decision, although the price of gold is anticipated to only respond moderately to these data points. The final readings of the S&P Global Manufacturing PMI, ISM Manufacturing PMI, and JOLTS Job Openings data will all be released on the US economic calendar.
Although it may not have much of an effect, the Federal Reserve may be concerned about slowing economic activity. on its choice this upcoming Wednesday.
As the US dollar continued to strengthen versus its key competitors on Tuesday, the price of gold resumed its corrective slide. Prior to the important US events, investors repositioned and covered their USD short positions. The month’s end flows entered the picture and destroyed the US Dollar’s rebound.
The decline in US Treasury bond rates contributed to the decline in the US Dollar while assisting in the rise in the price of gold.
Gold price may hit $1,900 once again, but buyers might reappear, increasing volatility.
As a result, the gold price may experience strong two-way trading, with the first response to the rate decision likely to change following Powell’s press conference. Volatility is expected to continue at its height since Wall Street index mood will also be a key factor. Although risk flows returned to American trade, turning the tide against the US Dollar bulls and helping Gold purchasers.
Investors are still optimistic that Federal Reserve Chair Jerome Powell would retain his hawkish language despite the tight labor market circumstances, even if a 25 basis points (bps) rate rise is already fully baked. decreased inflation from a top of 9.1% is probably enabling the Federal Reserve to proceed with a lesser rate rise, but it isn’t enough for Powell to prematurely cease the cycle of rate hikes. Powell won’t announce any changes to the policy prior to the March economic forecasts and the “Dot Plot” graphic.
