Gold price is virtually unchanged after the US Federal Reserve (Fed) released January’s meeting minutes, which reassured market participants that the Fed is in no rush to cut rates in the near term. Even though that could be seen as “hawkish,” US Treasury bond yields remained within familiar levels at the release, while the Greenback (USD) edged down by 0.04%. The XAU/USD trades within the $2020-30 range, at the time of writing.
The Federal Open Market Committee (FOMC) minutes showed Fed officials remain hesitant to cut rates too soon, while adding they did not see it appropriate to lower interest rates until they gained “greater confidence” in inflation moving sustainably towards 2%. Even though policymakers acknowledged that the risks of achieving both mandates is more balanced, they remained “highly attentive” to inflationary risks, even though economic risks are skewed to the downside. On the release, the US 10-year Treasury note yield is up three and a half basis points at 4.315%. At the same time, the US Dollar Index (DXY), which tracks the performance of the Greenback versus the other six currencies, dropped 0.04% to 104.01. Following the release, the Fed funds futures contracts continued to price in Jun as the first Fed rate cut. Gold is trading range-bound though tilted to the downside as the yellow metal has achieved a successive series of lower highs and lows. Stir resistance at the 50-day Simple Moving Average (SMA) at $2,033.54 might cap XAU/USD’s upside, but if cleared, that would pave the way to test the $2,050.00 figure. Upside risks lie at $2,065.60, the February 1 high. On the flip side, if sellers step in and push prices below the $2,000 figure, that will expose the 100-day SMA at $2,002.05. The next stop would be the December 13 low at $1,973.13, followed by the 200-day SMA at $1,965.86.
