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Gold weakens after several Federal Reserve officials voice their reluctance to cut interest rates yet.  The market continues to see a high probability of a cut in September, however. XAU/USD pulls back after a break higher invalidates orthodox H&S pattern.   Gold (XAU/USD) edges lower to around $2,310 on Wednesday as investors mull comments from Federal Reserve (Fed) officials, who continue to appear reluctant to cut interest rates amid stubbornly high inflation. The expectation that interest rates will remain elevated is negative for Gold as it keeps the opportunity cost of holding the non-coupon-yielding asset high.  Gold steadily declines on hawkish Fedspeak Gold ticks marginally lower on Wednesday following an over-half a percent decline on the previous day. Several Fed officials came up to the speakers’ stand one after another and said they think it is still too early to cut interest rates.  Fed Governor Lisa Cook said that “at some point, it will be appropriate to cut rates,” but  added that maintaining them at their current level was the right strategy at the moment “to respond to the economic outlook.” Fed Governor Michelle Bowman said on Tuesday that it was not yet appropriate to cut interest rates. Inflation data would have to be moving more sustainably towards the Fed’s 2.0% target before it was time to “gradually lower policy rate.” At the same time, she added that baseline estimates indicated that inflation was on its way down toward the target as long as the Fed keeps policy as it is “for some time.” On Monday, San Francisco Fed President Mary Daly said she did not believe the Fed should cut rates before it was more confident that inflation was headed towards 2.0%. Yet she also cautioned not to focus too heavily on inflation to the detriment of the labor market. If unemployment continued…

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Filed under: News - @ June 26, 2024 11:12 am