Gold Futures Tumble Below $2,300 as Traders Brace for Fed's Hawkish Pivot

Gold futures prices plummeted on Tuesday, dipping below the crucial $2,300 per ounce level, as traders braced for a potential hawkish shift from the Federal Reserve in its upcoming policy decision. The precious metal, often viewed as a hedge against inflation, came under intense selling pressure amid concerns that the central bank could strike a more aggressive tone on future rate hikes.

Traders widely anticipate that Federal Reserve Chairman Jerome Powell will deliver a much more hawkish press conference, potentially signaling a slower pace of rate cuts or even a pause in the central bank's easing cycle. This sentiment gained traction after Powell recently acknowledged that current levels of inflation would require more time to achieve the 2% target, stating,"Inflation has eased over the past year but remains elevated.

According to financial experts, the FOMC's potential shift in language regarding inflation and monetary easing bears significant implications for the markets. An acknowledgment of sustained high inflation rates could dampen hopes for imminent rate cuts, altering investment landscapes and risk assessments. If the FOMC opts to reduce the cap on Treasury balance sheet run-off, this could be interpreted as a cautious step towards tightening, albeit less aggressively than an outright rate hike.

has been a technical market analyst for 25 years. A frequent contributor to STOCKS & COMMODITIES Magazine, he has also written for Futures Magazine as well as Barrons. He is the executive producer of"The Gold Forecast," a daily video newsletter.

Source: Financial Digest (financialdigest.net)

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