Gold price hangs near multi-week low amid modest USD strength, focus remains on FOMC minutes


  • Gold price trades with a negative bias for the sixth straight day amid smaller Fed rate cut bets.
  • Hopes of a possible Hezbollah-Israel ceasefire further undermine the safe-haven commodity.
  • Traders look to the FOMC minutes for short-term impetuses ahead of the US inflation figures.

Gold price (XAU/USD) drifts lower for the sixth successive day on Wednesday and currently trades just above a three-week low touched the previous day, still above the $2,600 round-figure mark. Diminishing odds for a more aggressive policy easing by the Federal Reserve (Fed) lift the US Dollar (USD) to its highest level since August 16 and turn out to be a key factor undermining demand for the non-yielding bullion. 

Moreover, news of a possible ceasefire between Lebanon's Hezbollah and Israel further undermines the safe-haven Gold price and contributes to the downtick amid some technical selling following the overnight breakdown below the $2,630 static support. Traders, however, might refrain from placing aggressive bearish bets around the Gold price and opt to move to the sidelines ahead of the release of the FOMC meeting minutes. 

Daily Digest Market Movers: Gold price continues to be pressured by bullish USD, smaller Fed rate cut bets

  • The US Dollar held steady near a multi-week top touched last Friday amid diminishing odds for a more aggressive policy easing by the Federal Reserve, which dragged the Gold price below the $2,630 pivotal support on Tuesday. 
  • According to the CME Group's FedWatch Tool, investors are now pricing in over an 85% chance of a 25-basis-points Fed rate cut move at the November meeting and a 50 bps reduction in borrowing costs by the end of this year. 
  • New York Fed President John Williams said on Tuesday that it will be appropriate again to bring interest rates down over time and that September's 50bps rate cut should now be seen as the rule of how we act in the future.
  • Separately, Fed Governor Adriana Kugler said that approach to any policy decision will continue to be data dependent and that he will support additional rate cuts if progress on inflation continues as expected.
  • Furthermore, Boston Fed President Susan Collins noted that current monetary policy is helping to cool inflation, but the US economy and labor markets still appear strong, and core inflation still remains elevated.
  • Meanwhile, Fed Vice Chair Philip Jefferson said that economic activity continues to grow at a solid pace, while inflation has eased substantially and the labor market has cooled from its formerly overheated state.
  • The yield on the benchmark 10-year US government bond holds steady above the 4% threshold, which continues to exert some pressure on the non-yielding bullion for the sixth successive day on Wednesday. 
  • On the geopolitical front, Iran-backed Hezbollah hinted on Tuesday that it may be open to a ceasefire and notably omitted the end of the Gaza war as a condition for halting the conflict on the Lebanon-Israel border. 
  • Investors now look to the September FOMC meeting minutes for cues about the future rate-cut path, ahead of the US consumer inflation figures and the US Producer Price Index on Thursday and Friday, respectively. 

Technical Outlook: Gold price could extend the corrective decline once the $2,600 mark is broken decisively

From a technical perspective, the overnight breakdown through the $2,630 support, or the lower boundary of a short-term trading range, could be seen as a fresh trigger for bearish traders. That said, oscillators on the daily chart – though have been losing traction – are yet to confirm a negative bias. Hence, it will be prudent to wait for some follow-through selling and acceptance below the $2,600 mark before positioning for further losses. The Gold price might then extend the corrective slide towards the next relevant support near the $2,560 zone en route to the $2,535-2,530 region and the $2,500 psychological mark.

On the flip side, the trading range support breakpoint, around the $2,630-2,635 region, now seems to act as an immediate hurdle. Any subsequent move up could be seen as a selling opportunity and remain capped near the $2,657-2,658 horizontal barrier. A sustained strength beyond has the potential to lift the Gold price to the $2,670-$2,672 supply zone, above which bulls might aim to challenge the all-time high, around the $2,685-2,686 zone touched in September. This is closely followed by the $2,700 mark, which if cleared will set the stage for an extension of a well-established multi-month-old uptrend.

Economic Indicator

FOMC Minutes

FOMC stands for The Federal Open Market Committee that organizes 8 meetings in a year and reviews economic and financial conditions, determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. FOMC Minutes are released by the Board of Governors of the Federal Reserve and are a clear guide to the future US interest rate policy.

Read more.

Next release: Wed Oct 09, 2024 18:00

Frequency: Irregular

Consensus: -

Previous: -

Source: Federal Reserve

Minutes of the Federal Open Market Committee (FOMC) is usually published three weeks after the day of the policy decision. Investors look for clues regarding the policy outlook in this publication alongside the vote split. A bullish tone is likely to provide a boost to the greenback while a dovish stance is seen as USD-negative. It needs to be noted that the market reaction to FOMC Minutes could be delayed as news outlets don’t have access to the publication before the release, unlike the FOMC’s Policy Statement.

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

XM
Account
7.2
Tools
9.2
Service
9.4
Trading
9.0
Trust
7.0
Experience
8.4
Read review
Moneta Markets
Account
7.4
Tools
6.6
Service
8.0
Trading
6.6
Trust
5.2
Experience
9.2
Read review
Trading Pro
Account
7.2
Tools
5.2
Service
6.6
Trading
8.0
Trust
5.0
Experience
7.0
Read review
Pepperstone
Account
8.2
Tools
8.2
Service
7.4
Trading
9.0
Trust
8.8
Experience
9.0
Read review
XM
Read review
Moneta Markets
Read review
Trading Pro
Read review
Pepperstone
Read review
Trading Pro
Read review
Pepperstone
Read review
XM
Read review
Moneta Markets
Read review
Trading Pro
Account
7.2
Tools
5.2
Service
6.6
Trading
8.0
Trust
5.0
Experience
7.0
Read review
Pepperstone
Account
8.2
Tools
8.2
Service
7.4
Trading
9.0
Trust
8.8
Experience
9.0
Read review
XM
Account
7.2
Tools
9.2
Service
9.4
Trading
9.0
Trust
7.0
Experience
8.4
Read review
Moneta Markets
Account
7.4
Tools
6.6
Service
8.0
Trading
6.6
Trust
5.2
Experience
9.2
Read review

Recommended content


Recommended content

Editors’ Picks

EUR/USD accelerates losses to 1.0930 on stronger Dollar

EUR/USD accelerates losses to 1.0930 on stronger Dollar

The US Dollar's recovery regains extra impulse sending the US Dollar Index to fresh highs and relegating EUR/USD to navigate the area of daily troughs around 1.0930 in the latter part of Friday's session.

EUR/USD News
GBP/USD plummets to four-week lows near 1.2850

GBP/USD plummets to four-week lows near 1.2850

The US Dollar's rebound keep gathering steam and now sends GBP/USD to the area of multi-week lows in the 1.2850 region amid the broad-based pullback in the risk-associated universe.

GBP/USD News
Gold trades on the back foot, flirts with $3,000

Gold trades on the back foot, flirts with $3,000

Gold prices are accelerating their daily decline, steadily approaching the critical $3,000 per troy ounce mark as the Greenback's rebound gains extra momentum and US yields tighten their retracement.

Gold News
Can Maker break $1,450 hurdle as whales launch buying spree?

Can Maker break $1,450 hurdle as whales launch buying spree?

Maker holds steadily above $1,250 support as a whale scoops $1.21 million worth of MKR. Addresses with a 100k to 1 million MKR balance now account for 24.27% of Maker’s total supply. Maker battles a bear flag pattern as bulls gather for an epic weekend move.

Read more
Strategic implications of “Liberation Day”

Strategic implications of “Liberation Day”

Liberation Day in the United States came with extremely protectionist and inward-looking tariff policy aimed at just about all U.S. trading partners. In this report, we outline some of the more strategic implications of Liberation Day and developments we will be paying close attention to going forward.

Read more
The Best brokers to trade EUR/USD

The Best brokers to trade EUR/USD

SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.

Read More

Forex MAJORS

Cryptocurrencies

Signatures

Best Brokers of 2025