Spot gold edged lower in early Wednesday trading but remained close to the record high reached in the previous session. The precious metal’s slight losses this morning are linked to profit-taking after touching the $3,700 level and to a modest US dollar rebound, with the greenback recovering from more than two-month lows. This comes ahead of the Federal Reserve’s interest rate decision, with investors who had been betting on further dollar weakness pausing before the announcement. A 25bp cut is widely expected, though doubts persist over the Fed’s updated economic projections and forward guidance, which will shape the performance of the dollar and Treasury yields and, in turn, influence gold prices. Despite today’s pause, the broader trend shows traders increasingly positioning for a dovish tilt from the Fed in recent weeks. Combined with geopolitical tensions and economic uncertainty underpinning safe-haven demand, any confirmation of a dovish bias from today’s decision and statements could reignite the gold rally, with the next key resistance at $3,750 now in sight.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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