Gold prices remain range-bound in early Wednesday trading as markets await the conclusion of the FOMC meeting later today, with particular attention on the subsequent press conference. A rate cut is widely seen as a foregone conclusion and has long been priced in, meaning any surprises could significantly impact the markets. However, such a scenario is unlikely, and traders are expected to focus on the tone of the post-meeting press conference. The US economy has shown resilience, while the incoming administration's protectionist policies raise the prospect of renewed inflationary pressures—factors that may influence the central bank's decision-making and favour a "higher-for-longer" interest rate scenario. Against this backdrop, Jerome Powell may adopt a more hawkish stance, potentially driving treasury yields higher and strengthening the dollar, which would weigh on gold prices. Conversely, if the Fed Chair strikes a more neutral tone, there could be room for gains in the price of the precious metal as geopolitical instability continues to fuel demand
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
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