Gold prices fell in early Wednesday trading, giving back some of the gains recorded during the previous session, as the precious metal continues to face pressure from a strengthening US dollar. The greenback has extended its recent gains on the back of increasingly hawkish expectations for Federal Reserve monetary policy, with markets continuing to price in the possibility of another rate hike before the end of the year. Recent comments from Fed officials have reinforced this outlook, highlighting persistent inflationary pressures and the need to maintain a restrictive monetary policy stance. Meanwhile, the recent decline in oil prices is providing some support to bullion, as easing concerns over energy-driven inflation have contributed to lower US Treasury yields. However, so far, this has not been enough to offset the impact of the stronger dollar. Against this backdrop, gold traders will keep a close eye on today's US economic data, including PMI numbers, and further comments from Fed officials, while developments in the Middle East will also remain relevant through their impact on energy prices, inflation expectations and, ultimately, the outlook for US interest rates.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and as such is to be considered to be a marketing communication.
All information has been prepared by ActivTrades (“AT”). The information does not contain a record of AT’s prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk. Forecasts are not guarantees. Rates may change. Political risk is unpredictable. Central bank actions may vary. Platforms’ tools do not guarantee success.