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Gold Prices Dip as Hawkish Fed Commentary Dampens Rate Cut Hopes

3 weeks ago

Gold prices fell for the first time this week, pressured by growing market skepticism that the Federal Reserve will implement more than one interest rate cut in 2024. Current market sentiment suggests a 53% chance the Fed will hold rates steady in September, with a 60% probability of a rate cut in November. Recent hawkish remarks from Fed officials and persistent inflation concerns have reduced the likelihood of significant rate cuts, driving a rally in US Treasury yields and strengthening the US dollar against major currencies.

Looking ahead, the US dollar is expected to continue attracting haven demand amid heightened Middle East tensions, posing further challenges for gold prices. Market participants will also closely monitor the second estimate of Q1 US GDP data, weekly jobless claims, and pending home sales data, alongside speeches from New York Fed President John Williams and Dallas Fed President Lorie Logan.

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