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Home Gold News Gold Prices Inch Up Amidst Hawkish Tone from Federal Reserve Chair Powell

Gold Prices Inch Up Amidst Hawkish Tone from Federal Reserve Chair Powell

by anna

Gold prices saw a modest increase late in Tuesday’s North American session, climbing by 0.22% in response to a hawkish stance adopted by Federal Reserve Chair Jerome Powell. Despite mixed economic data from the United States (US), the previous day’s Retail Sales report and Powell’s remarks maintained higher US Treasury yields, limiting the yellow metal’s upward momentum.

XAU/USD is currently trading at $2,388 after reaching a daily low of $2,363. Heightened tensions in the Middle East have dampened risk appetite, with Israel poised to retaliate following Iran’s weekend attack, despite the White House’s stance of non-participation.

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Against this backdrop, gold appears poised to continue its upward trajectory. Powell’s acknowledgment of the US economy’s robust performance, coupled with the lack of significant progress on inflation according to recent data, has tempered expectations for multiple rate cuts by the Federal Reserve this year, as reported by Reuters. The CME FedWatch Tool indicates that the first rate cut may occur in September, with the likelihood of a quarter-percentage-point reduction standing at 71.38%.

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