- Gold price struggles for a direction as the Fed’s “higher for longer” interest-rates stance offsets safe-haven demand.
- Fed Powell supports keeping interest rates at high levels until there is confidence that inflation will ease to 2%.
- The US warns about sanctions on Iran in response to their attack on Israel.
Gold price (XAU/USD) balances below $2,400 in Wednesday’s European session. The precious metal struggles to recapture new all-time highs around $2,430 as Federal Reserve (Fed) Chair Jerome Powell emphasised maintaining the restrictive policy framework for a longer period. Powell and his colleagues seem to be leaning towards keeping interest rates higher for longer as inflation has remained stubborn and the labor demand remained strong.
The prospects for the Fed keeping interest rates higher for longer bodes well for the US Dollar and US bond yields. 10-year US Treasury yields fell slightly but remained close to a five-month high around 4.70%. The US Dollar Index (DXY), which measures the Greenback’s value against six major currencies, turns sideways after refreshing a five-month high near 106.40.
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