Gold: Fed hawkishness caps upside – ING
ING’s commodities team, led by Warren Patterson and Ewa Manthey, reports that Gold came under pressure after Federal Reserve Chair Kevin Warsh reinforced a higher-for-longer rates narrative, supporting the Dollar.
ING's commodities team led by Warren Patterson and Ewa Manthey reports that gold faced downward pressure after Federal Reserve Chair Kevin Warsh reinforced a higher-for-longer rates narrative, bolstering the US Dollar. Upcoming US inflation and labor data, central bank purchases, and geopolitical concerns will influence gold's near-term trajectory, with upside constrained by rate expectations.
On Friday, gold dropped following Warsh's signal that policymakers remain focused on bringing inflation back to the 2% target, dampening expectations of an imminent easing in monetary policy. The comments bolstered the US Dollar and pressured gold prices. Warsh emphasized that progress on inflation remains insufficient and reiterated that interest rates will remain the Federal Reserve's primary tool for achieving its objectives, which tends to weigh on non-yielding assets like gold.
Gold is expected to remain sensitive to forthcoming US inflation and labor market data. Although central bank buying and geopolitical risks should continue to provide fundamental support, a stronger Dollar and higher-for-longer rate expectations could stifle near-term upside momentum.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
