Gold prices climbed Thursday as traders remained cautious about the potential economic damage from some of the incoming US administration's policies. This uncertainty bolstered demand for haven assets such as gold. The gains in gold came despite a hawkish tone in the latest FOMC minutes, released on Wednesday, which revealed ongoing concerns among Federal Reserve officials about the resurgence of inflationary pressures. Following the release, Treasury yields rose, and the US dollar strengthened against major currencies—factors typically expected to weigh on gold prices. However, bullion managed to edge higher as investor concerns about broader economic risks outweighed the increased opportunity cost of holding the non-yielding asset. That said, the Federal Reserve's hawkish stance, suggesting interest rates may remain elevated for an extended period, is likely to act as a headwind for gold prices, capping its upside potential.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
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