Gold Price at Critical Juncture: Fed Chairman's Statements Await

5 jul 2023

The Gold Price (XAU/USD) is facing challenges in extending its recovery from a multi-month low that was reached last week, as traders eagerly await the release of the Federal Open Market Committee (FOMC) Minutes from the June meeting. Alongside the pre-event anticipation, concerns regarding a potential full-scale trade war between the United States and China are adding to worries about the global economic slowdown, thereby influencing the price of XAU/USD.

On the other hand, the softer economic data from the United States and expectations of increased Gold demand from India and China in the future provide some support to the precious metal's price. However, for sellers to regain control, they would need confirmation of the hawkish statements made by Fed Chairman Jerome Powell, such as the projection of "two more rate hikes in 2023." Additionally, breaking below the critical support level of $1,915 would also be crucial for sellers to establish their dominance in the market.

It is worth noting that the US markets were closed the previous day, resulting in a lack of significant catalysts and subdued trading activity. Traders are eagerly awaiting the return of full market participation, which could potentially influence the movements of XAU/USD.

As the release of the FOMC Minutes draws near and market conditions normalize, the Gold Price (XAU/USD) will likely experience increased volatility. Traders will closely analyze the minutes for any indications of the Federal Reserve's future monetary policy decisions, which could have a significant impact on the direction of XAU/USD.