The price of gold (XAU/USD) continued its sideways consolidative movement during the first half of the European session on Friday. Traders appeared hesitant amid uncertainty surrounding the Federal Reserve’s (Fed) stance on interest rate cuts. Recent hawkish comments from several Federal Open Market Committee (FOMC) members, combined with robust US macroeconomic data, have led investors to recalibrate their expectations for early and substantial rate cuts in 2024. This has contributed to higher US Treasury bond yields and a prevailing risk-on environment, diminishing the appeal of the safe-haven precious metal.
While the market still factors in the possibility of five rate cuts over the remaining seven FOMC policy meetings this year, US Dollar (USD) bulls remain somewhat restrained, providing some support to gold prices.
Investors, however, appear cautious and are choosing to stay on the sidelines as they await the release of the latest US consumer inflation figures next week. These figures are expected to play a crucial role in shaping the Fed’s future policy decisions, influencing both the USD sentiment and the potential direction for the non-yielding yellow metal.
