Article by: ETO Markets
Gold prices (XAU/USD) fell on Wednesday, retreating from Monday's record high. The Federal Reserve's latest comments suggest that interest rates may stay high for longer. Fed officials emphasized the need for more evidence of easing inflation before considering rate cuts. This could strengthen the US Dollar, putting pressure on USD-denominated gold.
However, gold's decline may be cushioned by ongoing US-China trade tensions, Middle East geopolitical issues, and strong demand from central banks and Asian buyers. These factors are likely to support the yellow metal.
Financial markets, using CME Group’s Fed Watch tool, predict the first rate cut in September, with two quarter-point reductions anticipated by year-end.
US-China Trade Tensions:
- The US announced tariff hikes on various Chinese goods on Tuesday.
- China might increase temporary tariffs on imported cars with large-displacement engines.
Key Events to Watch Today:
- FOMC Minutes release
- Speech by Fed’s Goolsbee
Stay updated on these developments to navigate the forex market effectively.
