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Gold Price Prediction: XAU/USD continues to struggle above $1,840 as rates surge ahead of the release of the Fed's minutes

Daniel Rogers

Feb 21, 2023 15:15

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In the Tokyo session, the gold price (XAU/USD) is exhibiting a mediocre performance over $1,840. Prior to the release of the Federal Open Market Committee (FOMC) minutes, the precious metal is gauging a direction, but volatility is expected to remain low.

 

In anticipation of the restart of U.S. markets following a long weekend, investors' appetite for risk has diminished as uncertainty has increased. This has resulted in a further decrease in risky assets such as S&P500 futures. Prior to the FOMC minutes, the US Dollar Index (DXY) has rebounded to approximately 103.70 but is still in the woods. In the meantime, the alpha provided by 10-year US Treasury bonds has surpassed 3.86 percent.

 

The Consumer Price Index (CPI) is recalcitrant and may drive Federal Reserve (Fed) chair Jerome Powell to boost interest rates further to manage inflationary pressures, as seen by a recent improvement in US economic indicators that forecast inflation. For additional guidance, the FOMC minutes will be closely monitored.

 

Prior to that, however, the preliminary S&P Global PMI (Feb) statistics will be closely monitored. According to the consensus, the preliminary Manufacturing PMI (Feb) will fall to 46.8 from 46.9 before. Additionally, the Services PMI will be released at 46,6 as opposed to 46,8 previously.


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