Gold retreats below $4,200 as traders cash out before Fed meeting
Gold (XAU/USD) dips some 0.80% on Tuesday as traders seem to be booking profits ahead of next week's Federal Reserve (Fed) monetary policy meeting, amid a firm US Dollar. At the time of writing, XAU/USD trades at $4,193, after hitting a daily high of $4,240.
XAU/USD falls as traders unwind positions before next week’s FOMC decision
An upbeat market mood weighed on Gold’s haven appeal, while the Greenback, according to the US Dollar Index (DXY), holds firm at 99.44, up 0.04%.
On Monday, the ISM Manufacturing Purchasers Managers Index (PMI) was weaker than expected in November, exerting pressure on the Fed to reduce borrowing costs. Bullion is also weakening due to hawkish comments by the Bank of Japan (BoJ) Governor Kazuo Ueda, who commented that the bank is evaluating whether to raise rates at the next policy meeting.
In the meantime, traders are waiting for the Fed’s December 9-10 meeting, with a divided committee. On the dovish side leans Fed Governors Christopher Waller, Stephen Miran, Michelle Bowman and New York Fed John Williams. On the hawkish front lie Boston Fed Susan Collins, Kansas City’s Jeffrey Schmid, St. Louis Alberto Musalem, Chicago’s Austan Goolsbee and Governor Michael Barr.
Meanwhile, with a neutral stance lie the Fed Chair Jerome Powell, the Vice-Chair Philip Jefferson and Governor Lisa Cook.
Ahead this week, Gold traders are eyeing the release of the ADP Employment Change report, and the release of the Fed’s favorite inflation gauge, the Core Personal Consumption Expenditures (PCE) Price Index, due on Friday.
Source: FXstreet.com
