Gold prices move steadily with US monetary policy
Gold (XAU/USD) was virtually stagnant on Wednesday after rebounding from a one-week low the previous day. The precious metal held firm as markets braced for the outcome of the Federal Reserve’s (Fed) final meeting of the year.
The Fed is widely expected to cut interest rates by 25 basis points (bps), but economic projections and a rate hike are likely to reveal an aggressive shift in the central bank’s forward guidance.
Recent US data showed that economic activity remains strong, consumption is rising, and inflationary pressures are high. Beyond that, US President-elect Donald Trump’s policies are expected to trigger higher price pressures.
This has forced investors to scale back expectations for monetary easing, which has triggered a sharp rebound in US Treasury yields and weighed on the yellow metal.
Source: FXStreet