Home Finance News Gold price hovers above $2,150 as traders anticipate Fed policy update.

Gold price hovers above $2,150 as traders anticipate Fed policy update.

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Gold price hovers above $2,150 as traders anticipate Fed policy update.

The Gold price continues to struggle to gain traction, hovering near a one-week low as traders await the outcome of the highly anticipated FOMC monetary policy meeting. The expectation of a hawkish Fed, with a commitment to higher interest rates amid persistent inflation, has bolstered the US Dollar to a two-week high, creating a headwind for the precious metal. Despite geopolitical risks from ongoing conflicts, investors are hesitant to make significant moves before the Fed’s decision.

The current market environment suggests a reduced likelihood of an interest rate cut by the Fed in June, supported by stronger US inflation figures and elevated Treasury bond yields. This has capped the upside potential for Gold, keeping it range-bound. The focus remains on the FOMC meeting for clues about the future rate-cut path, with Fed Chair Jerome Powell’s comments expected to impact the directional move of the non-yielding yellow metal. Technical analysis indicates a potential breakout through a descending channel, with key resistance levels to watch for further appreciation or downside movement.

In summary, the Gold price is caught in a consolidation phase as traders await crucial cues from the FOMC meeting. The impact of a hawkish Fed on the US Dollar, alongside geopolitical risks, influences the direction of the precious metal. Market participants are closely monitoring updated economic projections and Powell’s post-meeting comments for insights into future rate cuts and potential price movements. Technical indicators suggest a breakout scenario, highlighting key support and resistance levels for the Gold price in the near term.

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