Gold prices remained under pressure with traders’ attention turning toward the Federal Reserve.
Jerome Powell’s speech tomorrow could create significant price movements as investors look for additional clues regarding the direction of monetary policy.
Markets expect the US monetary policy to be at or near its interest rate hike strategy, however, another rate increase could still be possible. An aggressive stance from the US central bank president could weigh on gold’s performance over the coming days.
While yesterday’s PMI data created some doubts over the state of the economy in the US and Europe and supported a slight rebound in gold prices, today’s data on jobless claims in the US was better than expected and supported the case for a more aggressive monetary policy and pushed gold prices to the downside.
Elevated yields in the treasuries and bond markets also continue to dent gold’s attractiveness. In this regard, investors could continue to move toward treasuries while yields remain at current levels.
At the same time, the positive sentiment in the stock market following the stronger-than-expected earnings results from Nvidia could drive investors toward technology stocks and away from gold.
The strong growth in AI could continue to fuel the appetite for risk among some investors.
