The oil price looks optimistic. What are the reasons?
Gold fluctuates near 4-week minimum, suppressed by hawkish Fed outlook
On Thursday, gold extended previous session's post-FOMC decline and tumbled to an almost four week minimum of $1295.
The number one precious commodity was still under some selling pressure for the fourth trading session.
The US currency soared hard after the Fed policy statement hinted at one more interest rate lift this year. It coupled with an intention to get down to shrinking the Fed's huge $4.5 trillion balance sheet, which pressured gold.
The prevalent cautious market sentiment, backed by a moderate retracement in the American Treasury bond yields, gave some support to gold’s safe-haven demand and also helped to restrict deeper losses.
Apparently, a follow through selling pressure boasts the potential to keep dragging the major precious commodity towards its next support close to $1295 ahead of the $1284 region.
Sustained move back above $1300 level could potentially help gold to revive back towards the $1308-09 region, finding resistance near $1305.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.
The US dollar’s weakness offered a boost to emerging-market currencies and oil.