Gold Holds, Market Caution Ahead of FOMC Minutes
Gold prices (XAU/USD) maintained moderate intraday gains in the first half of the European session, hovering around the $3,322 area, although market participants tended to be cautious after the precious metal briefly touched a three-week low on Wednesday. The cautious tone was reflected in the weakness of most global stock markets, which provided little support for gold as a safe-haven asset.
On the other hand, hopes for a Russia-Ukraine peace deal curbed hedging interest, limiting gold's upside. This sentiment discouraged investors from pursuing aggressive long positions and opted to wait for certainty regarding the direction of US monetary policy from the Fed's official document.
Market expectations for more aggressive policy easing by the Federal Reserve began to fade. This helped the US dollar maintain its gains over the past two days, thus dampening the appeal of non-yielding gold. Relatively stable bond yields also helped restrain the precious metal's rally.
Looking ahead, the focus is on the FOMC Minutes, released tonight US time. The contents of the minutes will provide important clues about the likelihood of an interest rate cut at the next meeting. The US dollar's reaction and yield movements following the release are expected to determine gold's direction in the very short term. (ayu)
Source: Newsmaker.id
