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Gold prices climbed above $2,700 after the Federal Reserve (Fed) decided to lower interest rates and acknowledged that US election effects would not be felt in the near term. At the time of writing, XAU/USD trades at $2704, up more than 1.7%.Wall Street extended its gain after the Fed reduced the federal funds rate by a quarter of a percentage point on a unanimous decision. In the monetary policy statement, officials recognized the solid economic expansion, although labor market conditions softened. They acknowledged that inflation has moved closer to the Fed’s 2% goal but remains somewhat elevated.Fed policymakers also noted that the risks of meeting their dual mandate are “roughly balanced” but acknowledged uncertainty in the economic outlook. They will remain vigilant to risks on both sides of the mandate.In his press conference, Jerome Powell avoided giving specific guidance on future rate moves, leaving room for flexibility at the December meeting and beyond. He emphasized that the Fed could afford to take its time to lower rates due to the strong economy. He acknowledged that policy remains restrictive, even after today’s rate cut, as officials aim to bring rates to neutral levels.Regarding the pace of rate cuts, Powell mentioned that the Fed could speed up if the labor market weakens or slows down as it nears neutral. However, he clarified that no final decisions have been made yet.Earlier, the US Bureau of Labor Statistics (BLS) reported an anticipated increase in the number of Americans filing for unemployment benefits compared to the previous week.Ahead of the week, the US economic schedule will feature the University of Michigan (UoM) Consumer Sentiment for November on Friday, alongside a review of inflation expectations.
Daily Digest Market Movers: Gold price rallies boosted by lower US Real yields
XAU/USD Technical Outlook: Gold price tumbles with sellers eyeing $2,650
Gold rebounded at around the 50-day Simple Moving Average (SMA) at $2,639 and aimed towards $2,700, but buyers lacked the strength to push prices higher. The first key resistance area for bulls would be $2,700. If cleared, the next stop would be the 20-day SMA at $2,716, ahead of $2,750, followed by October 23 high at $2,758.On the other hand, a drop below the November 6 low of $2,652 could push the yellow metal to challenge $2,639, ahead of testing the October 10 low of $2,603.23. Momentum shifted neutral as the Relative Strength Index (RSI) turned bullish but shows signs of consolidation.More By This Author:
