Gold price clings to gains as Middle East tensions escalate
Gold price (XAU/USD) continues to advance amid the escalating Middle East crisis as US President Joe Biden has pledged to retaliate for unmanned aerial drone attacks on US service personnel near northeastern Jordan, near the Syrian border. Still, the precious metal could turn sideways as investors await the interest rate decision by the Federal Reserve (Fed), which will be announced on Wednesday.
Traders see the Fed holding interest rates in the range of 5.25%-5.50% amid consistently easing price pressures. Investors will focus on the timing at which Fed policymakers are comfortable for commencing the rate-cut campaign. The Fed is not confident yet that underlying inflation will sustainably return to 2% due to strong labor demand, robust Retail Sales, and a broadly upbeat economic outlook.
This week, investors will remain busy as various economic indicators from the US are lined-up for release. The ADP Employment Change will be released on Wednesday, just before the Fed’s policy announcement. These will be followed by the Institute for Supply Management (ISM) Manufacturing PMI on Thursday and Nonfarm Payrolls (NFP) data on Friday.
Traders see the Fed holding interest rates in the range of 5.25%-5.50% amid consistently easing price pressures. Investors will focus on the timing at which Fed policymakers are comfortable for commencing the rate-cut campaign. The Fed is not confident yet that underlying inflation will sustainably return to 2% due to strong labor demand, robust Retail Sales, and a broadly upbeat economic outlook.
This week, investors will remain busy as various economic indicators from the US are lined-up for release. The ADP Employment Change will be released on Wednesday, just before the Fed’s policy announcement. These will be followed by the Institute for Supply Management (ISM) Manufacturing PMI on Thursday and Nonfarm Payrolls (NFP) data on Friday.
