Daily Digest Market Movers: Gold price takes a brief pause amid reduced Fed rate cut bets
- The upbeat US jobs data released on Friday, along with the recent hawkish remarks by Federal Reserve officials, force investors to trim their bets for the total number of rate cuts in 2024 and cap gains for the Gold price.
- Chicago Fed President Austan Goolsbee acknowledged on Monday that the US economy remains strong, but the central bank must determine how long to be restrictive on monetary policy without damaging the economy.
- Minneapolis President Neel Kashkari said that the inflation rate is running around 3%, and the Fed has to get back down to 2%. The labor market is not red hot like it was 12 months ago, but it's still tight.
- The markets are now pricing in a nearly 50% chance that the Fed will leave the policy rate unchanged in June, lifting the yield on the benchmark 10-year US government bond to its highest level since late November.
- Elevated US Treasury bond yields act as a tailwind for the US Dollar and further contribute to keeping a lid on the non-yielding yellow metal, though geopolitical tension might continue to lend some support.
- Israel's Prime Minister Benjamin Netanyahu said that a date has been set for a ground offensive in the southern Gaza city of Rafah, tempering hopes for a potential ceasefire and keeping a lid on the latest optimism.
- Investors now look to the US Consumer Price Index (CPI) and the FOMC meeting minutes on Wednesday for clues about the Fed's rate-cut path, which should provide a fresh directional impetus to the XAU/USD.
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