Gold Remains Sideways, Market Nervously Awaits the Fed
The spot gold price against the US dollar (XAU/USD) moved sideways and remained within a narrow range that has persisted for about a week during the Asian session on Tuesday. Market participants tended to be cautious and chose not to take large positions ahead of the FOMC interest rate decision on Wednesday. The main focus will be on the Fed's latest economic projections, including the dot plot (forward-looking interest rate projections), as well as Fed Chairman Jerome Powell's press conference, which could provide clearer signals regarding the direction of the next interest rate cut. The outcome of this meeting has the potential to move the US dollar and provide a new trend for gold, which offers no interest yield.
For now, growing expectations that the Fed will cut interest rates this week, coupled with market bets that further cuts could continue until 2026, are holding back the US dollar's strengthening efforts. The greenback is still struggling to recover from its lowest level since late October, which it hit last week. This condition indirectly helps maintain gold's appeal, as a weak dollar typically makes the precious metal more attractive to buyers outside the US. In addition to interest rate factors, gold also continues to receive support from ongoing geopolitical risks, particularly the ongoing Russia-Ukraine war, as well as the remaining cautious global market sentiment. This keeps gold in demand as a safe haven asset. However, from a technical perspective, analysts believe it is too early to conclude that XAU/USD has reached a short-term top and is poised to decline within the larger trend. A stronger and more sustained sell-off signal is needed before the market can truly believe gold will enter a significant depreciation phase in the near future. (az)
Source: Newsmaker.id
