The post Gold extends the downside on Fed’s hawkish stance appeared on BitcoinEthereumNews.com.

Gold price trades with a negative bias on Thursday.  The hawkish stance of the FOMC minutes from last month’s meeting might cap the precious metal’s upside.  Investors will focus on the first reading of US PMI data for May, due on Thursday.   Gold price (XAU/USD) attracts some sellers on Wednesday. The further upside of the yellow metal might be limited, as the FOMC minutes were interpreted as significantly more hawkish than previous releases. The cautious approach of the US Fed to hold its restrictive policy for longer boosts the Greenback broadly and exerts some selling pressure on the gold price.  Gold traders will closely watch the preliminary reading of the US Manufacturing and Services Purchasing Managers Index (PMI) for May. A weaker reading might trigger hope for Fed rate cuts and support gold. Additionally, geopolitical tensions, uncertainties, and sticky inflation could support the precious metal and cap the downside in the near term. Apart from this, the Chicago Fed National Activity Index, weekly Initial Jobless Claims, New Home Sales, and Fed’s Bostic will be in focus.  Daily Digest Market Movers: Gold price remains sensitive to the Fed’s hawkish remarks The minutes from the recent policy meeting of the FOMC released Wednesday indicated that “participants observed that while inflation had eased over the past year, in recent months there had been a lack of further progress toward the Committee’s 2 percent objective.” The minutes further stated that “participants assessed that maintaining the current target range for the federal funds rate at this meeting was supported by data indicating continued solid economic growth.”  Investors have priced in nearly a 60% chance of the first cut to happen in September and two reductions of a quarter percentage point before the end of the year, according to the CME FedWatch Tool. The preliminary of US S&P Global Manufacturing and Service PMI is expected to remain unchanged at 50.0 and 51.3 in May, respectively.  The People’s Bank of China (PBoC) has been the largest buyer among its worldwide counterparts over the past…

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Filed under: News - @ May 23, 2024 9:10 am