Article by: ETO Markets

Gold prices (XAU/USD) faced selling pressure on Wednesday due to the hawkish tone of the latest FOMC minutes. The Federal Reserve's commitment to maintaining restrictive monetary policy has strengthened the US Dollar, negatively impacting gold prices.

- The FOMC minutes revealed that while inflation has eased, recent progress towards the 2% target has stalled. This supports the case for maintaining the current federal funds rate.
- Investors are pricing in a nearly 60% chance of a rate cut in September, with expectations of two quarter-point reductions by year-end, according to the CME Fed Watch Tool.
- The preliminary US S&P Global Manufacturing and Service PMI for May are projected to remain steady at 50.0 and 51.3, respectively.
- On the international front, the People's Bank of China has significantly increased its gold reserves, adding 225 tonnes last year, the largest annual increase since 1977. 

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