Gold’s ascent in the balance.

The Fed’s intentions

Gold market participants continue to keep a close eye on the Fed’s intentions. It should be noted that the market’s expectations about the bank continue to shift, aligning with the Fed’s narrative of fewer rate cuts and currently Fed Fund Futures imply that the market expects the bank to cut rates three times next year, starting from June onwards. On a fundamental level, we note the release of the Fed’s January meeting minutes.

The bank in its minutes displayed a hesitation to proceed with rate cuts, contradicting the market sentiment and temporarily halting gold’s rise on Wednesday. It’s characteristic that Fed Board Governor Waller at the end of last week noticed that he would require more evidence that inflation is easing before cutting interest rates. Such comments tend to highlight the hawkish predisposition of the Fed and may weigh on gold’s price.