Gold Settled Flat Ahead Of The Release Of The Fed Minutes.

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Gold Settled Flat Ahead Of The Release Of The Fed Minutes.
Credit: © Reuters.

Gold closed marginally lower by -0.09% at 62,108 as investors awaited the release of the Federal Reserve's meeting minutes. The minutes revealed that a majority of policymakers expressed concerns about the risks associated with premature interest rate cuts, emphasizing uncertainty about the duration of the current monetary policy stance. Participants highlighted the challenge of determining how long a restrictive policy would be necessary to achieve the Fed's 2% inflation target. Market expectations for Fed rate cuts have moderated, with traders now anticipating a total of 75 basis points in cuts this year, down from the previously forecasted 150 basis points. 

The Fed's cautious stance reflects the uncertain economic outlook, with a particular focus on inflation risks in the coming year. Fed Chair Jerome Powell emphasized the surprising strength of the US economy, driven by robust consumer demand and tightening labour conditions. Swiss gold exports surged in January, reaching their highest level since December 2016, driven by a 49% year-on-year increase in export volumes. Strong sales to China and Hong Kong contributed to this significant rise in monthly exports from the world's largest bullion refining and transit hub. 

Technically, the gold market witnessed long liquidation, with a 0.61% drop in open interest, settling at 13,374. Despite a price decline of -59 rupees, the market is finding support at 62,010, with a potential test of 61,915. Resistance is likely at 62,240, and a breakout could lead to testing at 62,375.

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