Gold prices (XAU/USD) are expected to remain under pressure as investors await the release of the Federal Open Market Committee (FOMC) minutes from the September meeting, scheduled for 18:00 GMT. These minutes are expected to offer insights into the Federal Reserve’s recent 50 basis point rate cut and provide guidance on inflation and economic conditions moving forward.
During the September meeting, the Fed officially began easing its policy after maintaining a restrictive stance for over two years. The decision to cut rates by 50 bps was largely supported by Fed officials, with the exception of Michelle Bowman, who dissented. The move reflected the Fed’s prioritization of job growth amid growing confidence that inflation would stabilize at its 2% target.
This week, attention also turns to the U.S. Consumer Price Index (CPI) data for September, set to be released on Thursday. Economists expect core CPI, which excludes volatile food and energy prices, to show a 3.2% year-over-year increase, while the headline CPI is projected to slow to 2.3% from 2.5% in August. The inflation data is likely to play a key role in shaping market expectations for the Fed’s interest rate policy for the rest of the year.
According to CME’s FedWatch tool, current pricing suggests a 25-bps rate cut in each of the two remaining Fed meetings this year. However, Dallas Fed Bank President Lorie Logan cautioned that inflation risks have not entirely disappeared. In a recent speech, Logan endorsed a gradual approach to rate cuts, signaling continued caution in the Fed’s policy decisions.
As traders digest these developments, gold prices remain sensitive to the evolving economic and inflation outlook.
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