Fed Meeting Minutes Signal Possible June Rate Hike
Gold prices declined on Wednesday and continued to fall in electronic trading following the release of minutes from the Federal Reserve's recent policy meeting. The minutes revealed that some central bank officials had advocated for an interest-rate hike in June. Investors were awaiting the U.S. jobs report on Friday for further insight into the central bank's plans regarding interest rates.
After the release of the Fed minutes, gold futures dropped to $1,926 in electronic trading. The minutes indicated that while some officials called for an interest-rate hike, the Fed ultimately voted unanimously to maintain the benchmark rate, which had remained steady for over a year. However, senior officials also suggested the possibility of a 50 basis points rate hike if inflation did not slow down quickly.
Analysts noted that investors would now turn to the June U.S. employment data for additional guidance on the Fed's stance on interest rates. If the jobs report is strong, it is expected to negatively impact gold prices, potentially pushing them below $1,900. Conversely, if gold prices rise above $1,932, with support from a weak jobs report, they could aim for $1,959 and $1,985 as key levels of resistance.
Gold prices had seen a modest increase on Monday before the holiday on Tuesday. Concerns about the global economy and fragile market confidence have driven investors to hold onto gold as a safe haven asset, despite the plans of the Fed and other central banks to raise interest rates. Recent downbeat economic data from the U.S., China, and other countries has contributed to renewed demand for gold.
In China, the Caixin private survey showed a sharper decline in services sector activity in June than expected. Meanwhile, a U.S. manufacturing health indicator contracted for the eighth consecutive month and reached its lowest level since May 2020. However, the Commerce Department reported a 0.3% increase in orders for U.S. manufactured goods in May, marking the fifth gain in the past six months.
Rupert Rowling, a market analyst at Kinesis Money, noted that underwhelming economic data from China and concerns about central banks' aggressive measures to combat inflation have raised worries about potential economic recessions.
Gold prices have experienced a downward trend over the past two months due to the anticipation of higher interest rates, which has strengthened the U.S. dollar. The ICE U.S. Dollar Index, which measures the dollar's strength against major currencies, showed a slight increase to 103.36 during Wednesday's trading.
XAUUSD BUY 1918 - 1915💯💯
✅ TP1: 1923
✅ TP2: 1928
✅ TP3: 1933
🛑 SL: 1912
After the release of the Fed minutes, gold futures dropped to $1,926 in electronic trading. The minutes indicated that while some officials called for an interest-rate hike, the Fed ultimately voted unanimously to maintain the benchmark rate, which had remained steady for over a year. However, senior officials also suggested the possibility of a 50 basis points rate hike if inflation did not slow down quickly.
Analysts noted that investors would now turn to the June U.S. employment data for additional guidance on the Fed's stance on interest rates. If the jobs report is strong, it is expected to negatively impact gold prices, potentially pushing them below $1,900. Conversely, if gold prices rise above $1,932, with support from a weak jobs report, they could aim for $1,959 and $1,985 as key levels of resistance.
Gold prices had seen a modest increase on Monday before the holiday on Tuesday. Concerns about the global economy and fragile market confidence have driven investors to hold onto gold as a safe haven asset, despite the plans of the Fed and other central banks to raise interest rates. Recent downbeat economic data from the U.S., China, and other countries has contributed to renewed demand for gold.
In China, the Caixin private survey showed a sharper decline in services sector activity in June than expected. Meanwhile, a U.S. manufacturing health indicator contracted for the eighth consecutive month and reached its lowest level since May 2020. However, the Commerce Department reported a 0.3% increase in orders for U.S. manufactured goods in May, marking the fifth gain in the past six months.
Rupert Rowling, a market analyst at Kinesis Money, noted that underwhelming economic data from China and concerns about central banks' aggressive measures to combat inflation have raised worries about potential economic recessions.
Gold prices have experienced a downward trend over the past two months due to the anticipation of higher interest rates, which has strengthened the U.S. dollar. The ICE U.S. Dollar Index, which measures the dollar's strength against major currencies, showed a slight increase to 103.36 during Wednesday's trading.
XAUUSD BUY 1918 - 1915💯💯 ✅ TP1: 1923
✅ TP2: 1928
✅ TP3: 1933
🛑 SL: 1912
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