Statements by Fed officials on interest rates have limited its rise gold, although the escalation of tension in the Middle East is likely to trigger a further increase.
The spot gold price moved to $2,356 on Monday, down 0.99%.
The likelihood that the Fed will keep interest rates unchanged this year is increasing. New York Fed President John Williams said last week that another rate hike is not his bottom line, but if the data tells the Fed it needs to raise rates to meet its targets, then the Fed apparently would like to do so.
The president of the Chicago Fed said that inflation progress has “halted” and that the Fed’s current tightening policy is appropriate.
At the same time, the president of the Atlanta Fed, Rafael Bostick, emphasized that the Fed will not cut interest rates until the end of the year. The shift in market sentiment may reduce the appeal of the non-yielding metals and weigh on the price of gold.
Investors are watching developments surrounding the conflict in the Middle East, and rising tensions in the region are likely to boost the price of gold, as well as traditional safe-haven assets.
Tags: Gold Downtrends Moving
