XAU/USD continued its downward trajectory on Wednesday, approaching an intraday low of $2,031.20 during mid-US afternoon trading. The US Dollar maintained its upward momentum, reaching fresh weekly highs against major counterparts. The current XAU/USD levels mirror those last seen on December 21, just ahead of the release of the Federal Open Market Committee (FOMC) Meeting Minutes.
A positive turn of events in the United States fueled the USD rally following the opening of Wall Street. The Institute for Supply Management (ISM) Manufacturing Purchasing Managers’ Index (PMI) showed improvement in December, surpassing expectations with a reading of 47.4, up from 46.7 in November. Additionally, the US Bureau of Labor Statistics (BLS) reported that the number of job openings on the last business day of November remained relatively stable at 8.8 million compared to the previous monthly reading. This data, suggesting a steadying labor market, supports the Federal Reserve (Fed) in maintaining a cautious approach.
Investors are eagerly awaiting further insights into the central bank’s stance, with the release of the FOMC Minutes expected in the mid-US afternoon. The minutes may provide clarity on the depth of discussions regarding potential rate cuts during the mid-December meeting and possibly indicate a timeline for the first rate cut. The market is currently pricing in the likelihood of a rate cut in May, and the FOMC Minutes could offer valuable information influencing market sentiment.
