Gold prices recovered on Thursday after the Federal Reserve (Fed) held rates unchanged, as the August 1 trade deadline imposed by US President Donald Trump looms. The Greenback remains steady on a tranche of good economic data, though the XAU/USD trades at $3,296, gaining 0.61%.
Yesterday, the Fed maintained the fed funds rate at the 4.25%-4.50% range on a 9-2 split decision, with Governors Bowman and Waller opting for a 25-bps rate cut. Besides this, the Fed Chair Jerome Powell pushed back against Trump's comments that they might ease policy in September and said that they would adopt a meeting-by-meeting approach.
In other news, the economic docket in the United States (US) was busy with a jump in the Fed's preferred inflation gauge, the core Personal Consumption Expenditures (PCE) Price Index. Alongside that, strong jobs data showed that Americans filing for unemployment benefits dipped. This hints at the US central bank's view that maximum employment has been achieved, further justifying the current policy stance.
In trade news, the US and Mexico reached a 90-day extension for the same deal of 25% tariffs due to fentanyl, 25% on cars, and 50% on steel, aluminum and copper. Meanwhile, the agreement between South Korea and the US on Wednesday continues to ease tensions regarding trade negotiations.
Even though trade uncertainty has diminished, Bullion's plunge following the Fed's decision seems to have taken the yellow metal to oversold levels. Hence, Gold buyers stepped in near July lows of $3,268, driving XAU/USD spot price toward the $3,300 figure.
Traders gear up for Friday's Nonfarm Payroll (NFP) figures for July, along with the announcement of the ISM Manufacturing PMI and the final University of Michigan (UoM) Consumer Sentiment index
Source: Fxstreet
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