Gold is showing signs of stabilising after last week’s fall with the precious metal trading just below $1,850 an ounce.
With little in the way of macroeconomic data releases or geopolitical news to drive prices today, traders and investors are taking the opportunity to fully assess the true state of markets, as well as the likeliest interest rate curve trajectory for the Federal Reserve and other major central banks.
In this environment, gold’s tumble has paused with the $100 an ounce drop in price since the start of February deemed sufficient punishment for an asset that was trading on a future scenario rather than present-day reality.
Later this week the minutes from the Federal Open Market Committee meeting from three weeks ago will be released, which should provide better insight into how hawkish the Fed remains after recent remarks by central bankers suggested a return to 50 basis point hikes was on the cards.
These hawkish comments were the trigger for gold’s price fall, so holders of the precious metal will be hoping that the minutes prove more dovish.
After a difficult week, gold is likely to drift sideways this week with the depth of support from central bank buying ensuring the downside is supported while the current environment in which more interest rate hikes are still likely means the upside potential for gold is also capped.
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