Gold hit a new low for the day at $1,953.32 after falling from a high of $1,967 on Friday’s US session and extending the previous session’s duration.
The Federal Reserve has been the subject of attention since, on Wednesday, after concluding its two-day meeting without raising rates, it published a hawkish outlook for interest rates. Prior to the end of the year, the Fed predicted additional rises of 50 basis points.
“It’s likely that the Fed will need to see signs of softening in the labour market before it feels confident that inflation is steadily declining.” The Fed Chair Powell noted that choices will be taken from meeting to meeting, therefore there was no direction provided for subsequent sessions. We still anticipate a 25bp increase in July,” ANZ Bank analysts said.
The dollar, meanwhile, rose early after three losing sessions. The US two-year note’s yield, which was last seen at 4.733%, was up 8.2 basis points, and the 10-year note’s yield, which was last seen at 3.772%, was up 4.9 basis points. From a low of 102.006 to a high of 102.427, DXY moved 0.13% higher.
The CTA trend followers have already started lengthening their positions in silver, where current prices might prompt a purchasing programme reaching +6% of this cohort’s maximum size. The bar for algo buying activity in gold markets is also extremely thin. Prices just need to rise beyond $1980/oz to trigger the first marginal purchasing programme, and above $2000/oz, there is an increased risk for additional buying flows, according to TD Securities analysts.