Gold fell around 0.6% to around $3,325/oz during Thursday's European session, after selling pressure emerged every time the price approached $3,350. The tone of the July FOMC minutes, which emphasized the need for clarity on the impact of tariffs on inflation, kept the market restrained and kept the US dollar strong - a combination that was less than favorable for gold.
However, there are differing views within the Fed. Michelle Bowman and Christopher Waller believe a 25 bps cut is preferable because they prioritize cooling the labor market. Officially, the Fed held interest rates at 4.25%-4.50% in July, while CME FedWatch still shows an 81.6% chance of a 25 bps cut to 4.00%-4.25% in September.
The next major catalyst is Jerome Powell's speech at the Jackson Hole Symposium on Friday. A hawkish tone (suppress inflation, be patient with cuts) could potentially curb gold's rally and strengthen the dollar. Conversely, dovish signals could trigger short-covering and drive a rapid recovery in gold. Technically, $3,350 remains a nearby resistance zone, while $3,300-$3,280 is a closely watched support area.
Geopolitically, the market is also monitoring news of Russia-Ukraine peace efforts, including reports of a possible trilateral meeting in Budapest. The prospect of a ceasefire tends to reduce the commodity's risk premium, but in the very near term, gold's direction will likely remain determined by Powell and the US dollar's response. (alg)
Source: Newsmaker.id
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