Home Business News Gold prices struggle amid lack of data and Fed’s hawkish stance boosting dollar

Gold prices struggle amid lack of data and Fed’s hawkish stance boosting dollar

21st May 24 12:16 pm

Gold prices faced a decline in momentum on Tuesday, following a surge that had earlier pushed the metal to record highs.

The retreat can be attributed to a session devoid of significant economic data, which has left traders without new catalysts to drive further gains.

In the absence of major market-moving events or data releases, the precious metal struggled to maintain its upward trajectory, as investors awaited fresh signals to guide their trading decisions.

This lull in economic indicators might limit the potential for substantial upside movement in the near term, keeping gold prices in a more constrained range as the market searches for new direction.

The hawkish stance adopted by Federal Reserve officials is expected to bolster the U.S. Dollar, exerting downward pressure on gold prices, which are denominated in USD. When the Fed signals a commitment to tighter monetary policy, such as raising interest rates or reducing its balance sheet, it generally leads to a stronger dollar.

This increase in the dollar’s value makes gold more expensive for investors holding other currencies, reducing demand and consequently pushing gold prices lower. As market participants anticipate further rate hikes and a more restrictive monetary environment, the strengthened Greenback is likely to continue weighing on the appeal of gold as an investment.

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