Trading strategy today, gold cools down

٩ مايو

Gold prices continued to fall in today's trading session, receiving little support from safe-haven demand as recent comments from US Federal Reserve (FED) officials showed the market was skeptical. Doubtful expectations of interest rate cuts.

The yellow metal saw some safe-haven demand this week as the conflict between Israel and Hamas worsened and ceasefire talks made little progress.

However, safe-haven purchases were offset by pressure from renewed concerns about high US interest rates as well as the dollar's recovery.

Prices for the yellow metal received little support from the dollar's recent decline, as the greenback rebounded on Tuesday after some Fed officials said the central bank was more likely to hold steady interest rate in 2024.

This view was voiced by Minneapolis Fed President Neel Kashkari on Tuesday and caused traders to rethink some expectations for interest rate cuts this year.

Expectations for a rate cut in September rose after weak payrolls data last week. But Kashkari and his colleagues say tough inflation remains the main point of contention for the Fed.

The prospect of higher long-term US interest rates is not a good sign for gold because it pushes up the opportunity cost of investing in the yellow metal.