GOLD Remains Indecisive at $1,965 Ahead of Crucial Fed Policy...

24. Juli 2023

GOLD Remains Indecisive at $1,965 Ahead of Crucial Fed Policy Decision

The price of gold (XAU/USD) is experiencing a lack of clear direction on Monday as investors eagerly await the Federal Reserve's (Fed) interest-rate decision, seeking crucial guidance. Anticipation revolves around the widely expected possibility of another interest-rate hike by the Fed to address the persistently stubborn inflation in the United States, aiming to bring it back to a 2% target.

With the market poised for an interest-rate increase, gold continues to display a lackluster performance despite softening inflation and a more relaxed labor market. The prevailing belief among investors is that the Fed will push interest rates into the 5.25-5.50% range, largely due to the core Consumer Price Index (CPI) holding steadfastly high, partly driven by resilient consumer spending.

As the decision nears, the focus lies on the interest-rate guidance provided by the Fed. There remains a divergence between the views of Fed officials and market participants concerning the peak of interest rates for the current year. While the Fed signals the possibility of two more interest-rate hikes, some investors expect that the upcoming rate increase will mark the last one in 2023.

This uncertainty surrounding the Fed's future interest-rate trajectory is contributing to gold's directionless trading, leaving investors on edge as they await the central bank's decision, which could have significant implications for the precious metal's performance in the near term.



TurnAround Point: 1972.00

Our preference

Short positions below 1968.00 with targets at 1957.00 & 1951.00 in extension.