Gold takes a rocky path to $1,940.00 on Fed reaction, decides to walk down on Fed rate call.
Fed outlook sees inflation slightly higher than predicted and holds steady on rates.
XAU/USD waffled on market reaction, recovery rally fails to extend.
The XAU/USD slipped to $1,940.00 after the Federal Reserve (Fed) held benchmark interest rates at 5.5% for the time being. The Federal Open Market Committee (FOMC) released their inflation expectations looking forward, seeing inflation a little bit higher than it previously forecast.
Fed Chair Jerome Powell took the podium to outline the Fed's position in a speech shortly after the rate call, and his overall tone kept Gold prices bolted to their initial reaction levels.
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Jerome Powell speaks on policy outlook following the decision to hold interest rate steady
Fed dot plot points to one more 25 bps hike in 2023 and 50 bps cut in 2024
According to the Fed's 'dot plot', the Summary of Projections (SEP), the US central bank is still on pace to deliver one last 25-basis-point hike in 2023. The median of Fed officials sees the official Fed funds rate at 5.1% by the end of 2024.
Fed Chair Jerome Powell reiterated the Fed's dedication to achieving their long-term 2% inflation target. While Chair Powell noted that the Fed is very likely to be near the top of the rate hike cycle, but reaffirmed that the Fed will base its future decisions on data.
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