Gold Prices Down amid Stronger USD; Focus Remains on FOMC Decision
Gold (XAU/USD) prices attracted some sellers heading into the European session on Tuesday (17/12) and retraced closer to the one-week low touched the previous day. Expectations that the Federal Reserve (Fed) will take a more cautious stance on cutting interest rates supported the US Treasury bond yields and acted as a tailwind for the US Dollar (USD). This, along with the underlying firmer tone around the equity markets, turned out to be a key factor driving flows away from the safe-haven precious metal.
The downside, however, seems limited as traders might opt to wait for the key FOMC decision for cues on the future path of interest rate cuts and before placing any fresh directional bets on the non-yielding bullion. Hence, the market focus would be on the accompanying policy statement, especially the so-called dot plot, and Fed Chair Jerome Powell’s speech at the post-meeting press conference. The outlook would drive both the USD and XAU/USD. Ahead of the key central bank risk event, the release of US Retail Sales figures will be looked upon for short-term opportunities during the North American session on Tuesday.
Source: FXStreet
