The gold price has shown minimal movement following the release of the January meeting minutes by the US Federal Reserve (Fed). The minutes indicated that the Fed is not in a hurry to implement rate cuts in the immediate future, offering reassurance to market participants. Despite the potentially “hawkish” tone, US Treasury bond yields remained stable, and the Greenback saw a marginal 0.04% decline. As of the latest update, the XAU/USD is trading within the $2020-2030 range.
The FOMC minutes revealed that Fed officials maintain a cautious approach regarding early rate cuts, expressing the need for “greater confidence” in inflation moving sustainably towards the 2% target before considering any reduction. While acknowledging a more balanced risk environment for achieving mandates, policymakers emphasized being “highly attentive” to inflationary risks, despite economic risks being tilted to the downside.
In response to the release, the US 10-year Treasury note yield increased by three and a half basis points to 4.315%. Simultaneously, the US Dollar Index (DXY), tracking the Greenback against six other currencies, recorded a slight 0.04% dip to 104.01. Following the minutes, Fed funds futures contracts continued to indicate June as the expected timing for the first Fed rate cut. The market remains watchful for further developments and signals from the Fed as it navigates economic conditions and potential shifts in monetary policy.
