Gold Clings On Support Level As Fed Minutes Awaited
Gold prices marginally drop in early APAC trading as the surge in US Dollar continues to put downward pressure on precious and industrial metals.
The previous weeks for gold have not been so glittery as its significant drivers were tumultuous. XAU prices are now hovering around 1922, a level that held gold through the second half of March.
On one hand, the ongoing war in Ukraine is providing shine to the precious metal as it highlights its safe-haven appeal amid spiking inflation and market volatility. The disrupted supply of commodities and services caused by the sanctions imposed on Russia continue to keep market watchers on edge.
But the burgeoning inflation is inciting an aggressive move from the Fed, hence the series of rate hikes. Gold is apparently suffering from rising rates, though there is really little evidence that the Fed fund rate hike consistently weakens it.
Now the attentions turn to the latest FOMC meeting to provide some fresh details on the Fed’s plans for another rate hike and a balance sheet run off.
Another indicator to look out for later this week is the March report of China’s CPI which can also impact gold prices.