Gold price edges lower for second day on bleak interest-rate outlook

Source Fxstreet
  • Gold price retreats for the second consecutive day on the back of elevated interest-rate expectations. 
  • Fed policymakers are expressing a reluctance to lower interest rates until more progress has been made on beating inflation. 
  • Their views are echoed in other parts of the globe further weighing on the Gold price which is sensitive to interest rates. 

Gold price (XAU/USD) trades lower by about a quarter of a percent in the $2,410s on Wednesday as a shift in the outlook for interest rates – both in the US and globally – weighs on the precious metal. 

Recent comments from US Federal Reserve (Fed) policymakers repeated the mantra that insufficient progress had been made in bringing inflation down to the Fed’s 2.0% target to warrant a lowering of interest rates. 

Their views weighed on the Gold price which, as a non-yielding asset, tends to perform poorly when interest rates are high due to the increased opportunity cost of holding Gold.

Gold price pulls back ahead of Fed Minutes  

Gold price might be further impacted when the Fed releases the Minutes of its latest policy meeting on Wednesday at 18:00 GMT. 

If the meeting minutes reflect a shift to a more hawkish stance amongst policymakers, Gold is expected to continue retreating. 

The recent Reserve Bank of Australia (RBA) meeting Minutes revealed that officials at the RBA had discussed the possibility of raising rates – a notable shift in stance from previous meetings. 

Technical Analysis: Gold price edges lower towards trendline support

Gold price (XAU/USD) edges down towards support from the green trendline, which reflects the short-term uptrend that began at the beginning of May.

The pair formed a Shooting Star Japanese candlestick pattern (shaded rectangle on the chart) on Monday, followed by a bearish close the following day, providing additional confirmation. The pattern is indicative of short-term weakness.  

XAU/USD Daily Chart


 

If the pullback continues, Gold will probably fall to initial support at the green trendline at about $2,405. Further weakness could take it down to the dark grey upward-sloping trendline in the $2,360s. 

However, the precious metal’s short, medium and long-term trends are bullish, and given the old adage that “the trend is your friend”, the odds favor an eventual recovery after the correction. 

A break above the new $2,450 all-time high would likely continue the rally to the next target at the psychologically significant $2,500 level. 

Economic Indicator

FOMC Minutes

FOMC stands for The Federal Open Market Committee that organizes 8 meetings in a year and reviews economic and financial conditions, determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. FOMC Minutes are released by the Board of Governors of the Federal Reserve and are a clear guide to the future US interest rate policy.

Read more.

Next release: Wed May 22, 2024 18:00

Frequency: Irregular

Consensus: -

Previous: -

Source: Federal Reserve

Minutes of the Federal Open Market Committee (FOMC) is usually published three weeks after the day of the policy decision. Investors look for clues regarding the policy outlook in this publication alongside the vote split. A bullish tone is likely to provide a boost to the greenback while a dovish stance is seen as USD-negative. It needs to be noted that the market reaction to FOMC Minutes could be delayed as news outlets don’t have access to the publication before the release, unlike the FOMC’s Policy Statement.

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Financial Markets 2026: Volatility Catalysts in Gold, Silver, Oil, and Blue-Chip Stocks—A CFD Trader's OutlookGet a comprehensive financial market 2026 outlook exploring key economic drivers, volatility catalysts in gold, oil and stocks, and what the evolving economic outlook means for cfd trading strategies and risk management on global markets.
Author  Rachel Weiss
4 hours ago
Get a comprehensive financial market 2026 outlook exploring key economic drivers, volatility catalysts in gold, oil and stocks, and what the evolving economic outlook means for cfd trading strategies and risk management on global markets.
placeholder
Bitcoin Weekly Forecast: Is the month-long rally over?Bitcoin (BTC) edges slightly lower so far this week, trading at $80,800 on Friday after being rejected around the key overhead supply zone. Institutional investors also show cautious signs, with BTC spot Exchange Traded Funds (ETFs) recording an outflow of over $709 million through Thursday.
Author  Bitcoinist
5 hours ago
Bitcoin (BTC) edges slightly lower so far this week, trading at $80,800 on Friday after being rejected around the key overhead supply zone. Institutional investors also show cautious signs, with BTC spot Exchange Traded Funds (ETFs) recording an outflow of over $709 million through Thursday.
placeholder
Australian Dollar softens to near 0.7200 as Trump and Xi set for second day of talks The AUD/USD pair attracts some sellers to near 0.7205 during the early Asian trading hours on Friday. Markets remain cautious ahead of the second day meeting between US President Donald Trump and Chinese President Xi Jinping in Beijing on Friday.
Author  FXStreet
14 hours ago
The AUD/USD pair attracts some sellers to near 0.7205 during the early Asian trading hours on Friday. Markets remain cautious ahead of the second day meeting between US President Donald Trump and Chinese President Xi Jinping in Beijing on Friday.
placeholder
Gold edges higher to near $4,700 as Trump-Xi summit loomsGold price (XAU/USD) trades in positive territory near $4,700 during the early Asian session on Thursday. The precious metal edges higher as markets turn cautious ahead of the US President Donald Trump-Chinese President Xi Jinping summit in Beijing.
Author  FXStreet
Yesterday 01: 33
Gold price (XAU/USD) trades in positive territory near $4,700 during the early Asian session on Thursday. The precious metal edges higher as markets turn cautious ahead of the US President Donald Trump-Chinese President Xi Jinping summit in Beijing.
placeholder
Inflation 'High Fever' Fails to Stop Rally? BTC Temporarily Loses 80,000 Mark, But Arthur Hayes Sees Peak of $126,000CPI data exceeding expectations triggered Bitcoin's drop below $80,000, yet the BitMEX co-founder remains firmly bullish on BTC.On May 13, Bitcoin ( BTC) prices experienced a correction f
Author  TradingKey
May 13, Wed
CPI data exceeding expectations triggered Bitcoin's drop below $80,000, yet the BitMEX co-founder remains firmly bullish on BTC.On May 13, Bitcoin ( BTC) prices experienced a correction f
Related Instrument
goTop
quote