Daily Digest Market Movers: Gold price is pressured by modest USD strength; Fed rate cut bets to lend support
The US Dollar looks to build on the previous day's strong recovery from a one-week low touched in the aftermath of the FOMC decision and is seen undermining the Gold price on Friday.
The Federal Reserve upgraded its economic growth projection and now sees real GDP to hit 2.1% by the end of this year as compared to the previous estimate of 1.4% in December.
Moreover, policymakers raised the forecast for core inflation to 2.6% from 2.4% and now see the unemployment rate at 4% for 2024, slightly lower than the 4.1% previously projected.
The outlook remains supportive of elevated US Treasury bond yields and is seen acting as a tailwind for the USD, though the projected less restrictive policy might cap the upside.
On the economic data front, the US Department of Labor (DOL) reported on Thursday that Initial Jobless Claims fell to 210K in the week ending March 16 from the 212K previous.
US Secretary of State Antony Blinken said that gaps are narrowing in the ongoing talks aimed at reaching a ceasefire in Gaza and the release of hostages, boosting investors' confidence.
Fed Chair Jerome Powell's speech later during the early North American session will be looked for more cues about future policy decisions and provide a fresh impetus to the XAU/USD.
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