Gold Faces Challenges Amid Rate Hike Uncertainty
Updated
Gold price (XAU/USD) faces challenges in capitalizing on the modest gains from the previous day and trades within a narrow range, below the psychological level of $2,000 in the first half of the European trading session. Investors appear hesitant to commit to a positive direction, seeking clearer insights into the Federal Reserve's (Fed) interest rate trajectory.
The hawkish tone in the FOMC minutes released on Tuesday added to the uncertainty. Furthermore, optimistic data on the U.S. labor market and consumer sentiment on Wednesday fueled speculations that the Fed might keep interest rates higher for an extended period. This, coupled with the rise in U.S. Treasury yields, emerged as a primary hindrance for Gold to generate profits at the week's end.
Nevertheless, market participants seem convinced that the U.S. central bank will maintain stable interest rates rather than increasing them, assessing the possibility of implementing a series of rate cuts in 2024. This hampers the USD recovery this week from its lowest levels since August 31. Additionally, weak signals from the stock market will benefit Gold as a safe-haven asset and help limit any significant downturn.
Despite these challenges, XAU/USD continues to mark a second consecutive weekly gain as traders seek momentum from flash PMI indicators in the U.S.
The hawkish tone in the FOMC minutes released on Tuesday added to the uncertainty. Furthermore, optimistic data on the U.S. labor market and consumer sentiment on Wednesday fueled speculations that the Fed might keep interest rates higher for an extended period. This, coupled with the rise in U.S. Treasury yields, emerged as a primary hindrance for Gold to generate profits at the week's end.
Nevertheless, market participants seem convinced that the U.S. central bank will maintain stable interest rates rather than increasing them, assessing the possibility of implementing a series of rate cuts in 2024. This hampers the USD recovery this week from its lowest levels since August 31. Additionally, weak signals from the stock market will benefit Gold as a safe-haven asset and help limit any significant downturn.
Despite these challenges, XAU/USD continues to mark a second consecutive weekly gain as traders seek momentum from flash PMI indicators in the U.S.
Trade active
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.