On Friday, the price of gold (XAU/USD) maintained a positive trajectory. The recent bullish movement in precious metals, observed in preceding sessions, found additional support from softer-than-anticipated US inflation data for April. This data instilled hopes for potential rate cuts from the US Federal Reserve (Fed).
However, sentiments shifted on Thursday as Fed officials adopted a cautious stance, signaling a willingness to keep borrowing costs elevated for an extended period. This suggested that the US central bank is not inclined towards imminent interest rate cuts in the current year. Consequently, such a stance could bolster the US Dollar (USD) across the board and exert downward pressure on the yellow metal. The prospect of higher interest rates may diminish overall investment demand for non-yielding assets like gold.
With a lack of significant economic data releases from the US calendar, market participants are closely monitoring speeches from Federal Reserve officials, as they may provide insights into the future trajectory of the Fed’s monetary policy. Scheduled speeches by Fed members Kashkari, Waller, and Daly later on Friday are anticipated to offer valuable clues regarding the Fed’s stance and potential policy adjustments.
