The minutes to the 3 May FOMC meeting when it hiked rates by 25bp echo the comments we have been hearing from officials. “Some” members clearly think there is more work to do to constrain inflation, but “several” think they may have already done enough. The market pricing of a 30% chance of a June hike seems fair, but volatility looks set to continue
Gold has been unappealing to buyers for three weeks. Strong economic data and high inflation led to a drop in gold prices. For the third consecutive week, the price per ounce of gold fell, leading to renewed discussions of a June rate hike. This shift in interest rate projections is the primary explanation for the decrease in gold’s value.
The Japanese yen is in a tight buyer position, which could be the end of a 1-week rally for the US dollar. During this time, the yen fell and the day hit a six-month low.
Although the ounce of gold had a rough week, falling almost $50 and experiencing its worst performance since February, we saw a bullish return to the market on Friday.
US CPI Preview: Core CPI at 0.4% or lower monthly component gives stocks, and gold the chance to advance and the greenback.
Uncertainties increase the attractiveness of gold due to diminishing returns. Today’s gold movements are in stabilization mode. This is due to falling interest rates (due to US banking problems).
Today, the Federal Reserve will raise interest rates by 25 percent.
The probability of yen weakness is higher than its strength.
The first decision of the new Bank of Japan Governor Kazuo Ueda was carefully followed by traders. It will be no different from the recent decisions of the previous BOJ chief Haruhiko.
Volatility in the bond market and uncertainty about interest rate cuts are pushing the dollar higher, dimming the appeal of gold (XAU).
Last week, the recovery of the US dollar affected the price of gold (XAU) and put pressure on gold. Because market participants assessed the possibility of the Federal Reserve raising interest rates in May. However, there are still many buyers and markets for gold, who see the fear of stagnation more strongly.
The US dollar failed to sustain gains on Wednesday, strengthening EUR/USD. As financial markets falter, the euro-dollar continues to move.
Gold prices are under pressure from a weaker US dollar, and China’s economic recovery, but uncertainty about the Federal Reserve’s monetary policy is limiting growth.
