Gold Hangs in the balance, is the FOMC Ready to Make a Move?
Gold (XAU/USD) is still struggling to continue its upward movement after rebounding from around $4,170, its lowest level in a week. Prices are now moving within a narrow range near the weekly high reached in the Asian session on Wednesday. Market participants appear hesitant to place large positions as they await the outcome of the Federal Reserve's (FOMC) policy meeting in two days, which could determine gold's next direction.
The market's primary focus is on the latest economic projections and Fed Chairman Jerome Powell's speech, which will be scrutinized for signs of the extent and speed of future interest rate cuts. The Fed's decision and tone will significantly influence the movement of the US dollar, which ultimately also triggers a new direction for gold as a non-yielding asset.
In the meantime, expectations of further interest rate cuts have kept the US dollar weakening, holding it near its lowest level since late October. Furthermore, cautious market sentiment and ongoing geopolitical tensions stemming from the Russia-Ukraine war maintain interest in gold as a safe haven. However, because gold price movements have been limited since the beginning of the month, market participants are considered wise to wait for a strong breakout to the upside or downside before confirming the short-term trend direction of XAU/USD. (az)
Source: Newsmaker.id
