XAUUSD ahead of PPI news and FOMC meeting
- Gold price continues to draw support from reduced bets for further interest rate hikes by the Federal Reserve and geopolitical tensions in the Middle East. Atlanta Fed President Raphael Bostic said on Tuesday that the US central bank does not need to raise rates any further to get inflation back to the 2% target.
- Minneapolis Fed President Neel Kashkari added that the recent rise in long-term Treasury bond yields could aid the central bank in its battle against inflation. The repricing of the Fed's rate-hike path leads to a further decline in the US bond yields and continues to weigh the US Dollar (USD), benefitting the XAU/USD.
- The expansion of the Israel-Gaza conflict to the wider Middle East would push Crude Oil prices higher and complicate the Fed's effort to reduce inflation. This might force the US central bank to stick to its hawkish stance and add another layer of complexity, making a soft landing more difficult to achieve.
- Apart from this, the Israel-Gaza conflict is seen lending some support to the safe-haven Gold price. The markets, meanwhile, are still pricing in the possibility of at least one rate hike by the end of this year. This, along with a generally positive tone around the equity markets, keeps a lid on any further gains for the precious metal. Traders now look to Wednesday's release of the US Producer Price Index (PPI) and the FOMC minutes for some impetus ahead of the US CPI on Thursday.
*Psychology, discipline and capital management are the three factors that make victory possible*
- Minneapolis Fed President Neel Kashkari added that the recent rise in long-term Treasury bond yields could aid the central bank in its battle against inflation. The repricing of the Fed's rate-hike path leads to a further decline in the US bond yields and continues to weigh the US Dollar (USD), benefitting the XAU/USD.
- The expansion of the Israel-Gaza conflict to the wider Middle East would push Crude Oil prices higher and complicate the Fed's effort to reduce inflation. This might force the US central bank to stick to its hawkish stance and add another layer of complexity, making a soft landing more difficult to achieve.
- Apart from this, the Israel-Gaza conflict is seen lending some support to the safe-haven Gold price. The markets, meanwhile, are still pricing in the possibility of at least one rate hike by the end of this year. This, along with a generally positive tone around the equity markets, keeps a lid on any further gains for the precious metal. Traders now look to Wednesday's release of the US Producer Price Index (PPI) and the FOMC minutes for some impetus ahead of the US CPI on Thursday.
*Psychology, discipline and capital management are the three factors that make victory possible*
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