Gold price trims earlier gains and retreats after the US Federal Reserve decided to keep rates unchanged while pushing back against speculation of rate cuts. In addition, the US Federal Reserve Chair Jerome Powell, pushed back against rate cuts in March, driving the yellow metal price towards the day lows. At the time of writing, XAU/USD trades volatile within the $2030 – $2040 area as market participants diggest Fed Chairman Jerome Powell’s comments. Fed Chair Jerome Powell commented that policy rates likely peaked and has opened the door to rate cuts this year, adding that it would depend on the evolution of the economy. He added the economic outlook remains uncertain, and would decide meeting by meeting. He added that no rate cuts were discussed in the meeting, and they’re in no rush to declare victory in the fight against inflation.
Recently, he said that he doesn’t think a rate cut in March is on the table. In its monetary policy meeting, Fed officials voted unanimously to keep rates unchanged. They noted that it would be appropriate to reduce rates until there is greater confidence that inflation is sustainably moving toward its 2% goal. The Fed added that risks of achieving the Fed dual mandate are moving into better balance and emphasized that the committee will remain “highly attentive” to inflation risks. Regarding the reduction of the balance sheet, it would remain as previously described while tightening restrictions on all Fed staff with access to confidential FOMC information. After the data, the US 10-year Treasury note yield spiked to 4% before retreating somewhat towards 3.97%. At the same time, the US Dollar Index (DXY) aimed toward 103.50 before getting back to 103.35. Gold is going toward $2030, extending its losses sharply after Powell’s remarks disregarding a rate cut in March, at around 19:02 GMT. That said, if sellers push prices below the lows of the day of $2032, look for a drop to the January 25 low of $2009.66. On the flip side, if the daily high is taken out, $2050 is up next, followed by the $2090 and $2100 figure.
