Category Commodities

Gold surges, eyes key $2,000 level as dollar weakens

Gold eyes $2,000 as weak dollar propels surge; Fed minutes today may provide clarity on future rate hikes.
Berto Tordecilla

Berto Tordecilla

Gold prices surged during the Asian trading session on Tuesday to reach a high of $1,994.53, as the precious metal continues its upward momentum thanks to a weakening US dollar.

With the greenback sliding since last week Monday, gold has taken advantage, rising steadily higher. The dollar’s decline comes as markets believe the Fed’s aggressive rate hike cycle is nearing its end.

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Today’s highly anticipated Fed meeting minutes could offer further clues into future monetary policy direction. If dovish, hinting at a pause in hikes, it could pave the way for gold to breach the psychologically important $2,000 level. However, more hawkish signals may stall gold’s rally.

While the Fed is expected to stop raising rates, sustained high interest rates dampen non-yielding gold’s appeal. Market participants are pricing in potential rate cuts starting March 2024, according to CME Group’s FedWatch tool, albeit with only a 30% probability currently.

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