Gold Prices Suffer With Upbeat FOMC Report
By Daisy Joseph
The Federal Reserve reports are carefully monitored by investors as they indicate the path of the monetary policy.
The first quarter economic data is not entirely supportive as it showed much slower growth. While the investors were worried about the outcome, the market sighed a breath of relief as the Federal Reserve officials considered the slower growth as transitory. This means that the Fed officials are keen on proceeding with the tightening plan as expected earlier.
Bets on Fed Funds futures for a hike in June is currently at 97%, which is a huge raise from 67% just a day ago. The increase in rate hike bets has directly helped the Treasury bond yields to gain in the market. The US dollar too surged after the announcement from the Fed officials.
The increase in the value of the US dollar has resulted in the gold prices to plunge down. The economic data supported gold, but Fed’s outlook doesn’t provide a possibility for the yellow metal to dominate the market. Traders are now focused on the US labor market reports that are due on Friday. The statistics are expected to indicate a growth in payroll which raised in April after reaching a 10 month low in March.
Gold price went down to a six-week low after a fall in November. The barrier on the downside is expected to be at 1218.90 which is a significant inflection point in the last seven months. When there is a turn back, the falling trend resistance is expected to be at 1284.47.
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