Gold price falls back $2,065 as the impact of deep Fed rate cut hopes start fading away
Gold price (XAU/USD) has extended its correction but a consolidation is likely ahead due to thin trading activity. Broadly, the precious metal may continue to remain in the positive trajectory as bets in favor of early rate cuts by the Federal Reserve (Fed) are firming due to easing labor market conditions and a clear downtrend in the underlying inflation. This lowers the opportunity cost of holding the yellow metal and weakens the US Dollar, in which it is priced.
The Gold price is set to end 2023 with stellar gains of more than 13.50%. Deepening expectations for the Fed to start reducing interest rates from March 2024 will also keep appeal for the Gold price upbeat in 2024. Further action in the Gold price will be guided by the United States Nonfarm Employment and ISM Manufacturing PMI for November. Gold price drops below Thursday’s trading range of $2,064-2,088. Trading volume is thin amid absence of a significant number of market participants due to the festive week. The precious metal witnessed some profit-booking on Thursday. On a broader note, upward-sloping 20 and 50-day Exponential Moving Averages (EMAs) point to more upside ahead. In addition to them, oscillators indicate strong momentum in an upside direction.