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Gold draws comfort from FOMC minutes’ dovish clues

Gold is attempting to hang on to a weekly gain, as it finds a firmer footing around the mid-$1700 region for the time being, making the most of the dollar’s pullback this week.

This week’s FOMC minutes revealed that a “substantial majority” of Fed officials may be more willing to embrace a downshift in rate hikes, offering further relief for the zero-yielding precious metal.

Gold draws comfort from FOMC minutes’ dovish clues

Spot gold is set to capitalise on more dovish coos that make the US rates’ peak appear closer.

  • As more Fed doves peek out from behind the ultra-hawkish curtains, that may inspire bullion bulls to make another run towards the psychological $1800 mark, around where the 200-day simple moving average (SMA) also lies.
     
  • However, if the Fed hawks swoop back in and disrupt the “pivot” narrative once more, that may see gold unwinding more of its recent gains to test support around the low-$1700s which marks the 100-day SMA and early-October cycle high.

 

Support for gold may also falter if China’s latest Covid curb saps demand for the precious metal, with King Dollar having already proven to be the preferred safe haven asset for much of this year.

 

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