• Gold reacted downwards towards the low $1,840s on the release.
  • FOMC: Officials do not expect to cut rates in 2023.
  • FOMC: Policymakers did not express the size for further rate hikes.

Gold price clings to gains around $1850 following the release of the Federal Reserve’s Open Market Committee (FOMC) minutes for the last meeting, which emphasized the need for the central bank to tighten conditions amid stubbornly high inflation levels. At the time of writing, the XAG/USD is trading at around $1,850.

Summary of the FOMC minutes

The December minutes showed that policymakers agreed to slow the pace of interest rate hikes but added that a slowdown is not a “weakening commitment to achieving price stability on that inflation is already on a persistent downward path.”  Fed officials added that the US central bank had made significant progress in moving to restrictive policies and added that no rate cuts would be necessary for 2023.

Additionally, policymakers added that inflation risks could be more persistent and that further increases to the Federal Funds rate (FFR) would be appropriate.

US Dollar and Gold’s reaction

The US Dollar Index (DXY) headed towards 104.409 but retraced some of its gains. The XAU/USD slumped below $1,850, extending its drop towards $1,843, though, at the time of typing, it seesaws around the $1,850 figure.

Regarding US Treasury bond yields, which play a big part in XAU/USD’s direction, the 10-year benchmark note rate sits at 3.709%, falling three and a half bps during the day. Therefore, if XAU/USD holds to gains above $1,850, that could pave the way for a test of $1,900.

Gold Hourly Chart

XAU/USD

Overview
Today last price 1850.43
Today Daily Change 12.27
Today Daily Change % 0.67
Today daily open 1838.16
 
Trends
Daily SMA20 1803.06
Daily SMA50 1757.02
Daily SMA100 1724.08
Daily SMA200 1779.26
 
Levels
Previous Daily High 1850.03
Previous Daily Low 1824.7
Previous Weekly High 1833.38
Previous Weekly Low 1797.11
Previous Monthly High 1833.38
Previous Monthly Low 1765.89
Daily Fibonacci 38.2% 1840.35
Daily Fibonacci 61.8% 1834.38
Daily Pivot Point S1 1825.23
Daily Pivot Point S2 1812.3
Daily Pivot Point S3 1799.9
Daily Pivot Point R1 1850.56
Daily Pivot Point R2 1862.96
Daily Pivot Point R3 1875.89

 

 

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