Gold Prices Snap Three-Day Winning Streak As Fed’s Hawkish Sentiment And Modest Dollar Strength

Gold (XAU/USD) has now appeared to snap a three-day winning streak after hitting a one-week high of $2,341-2,342 the day before, as it encountered fresh selling in early European trading on Thursday. The unexpectedly hawkish Fed decision on Wednesday largely overshadowed weak US consumer inflation data.

Meanwhile, the Fed’s adjustment of inflation and interest rate forecasts led to a slight rise in US Treasury yields, boosting the US dollar (USD) to continue its rally from multi-day lows overnight and further weighing on gold prices. Nevertheless, geopolitical tensions in the Middle East and political uncertainty in Europe should provide some support for gold prices. However, the broader fundamental backdrop shows the least resistance to the downside for gold prices. Traders will now focus on US economic data on Thursday, including the Producer Price Index (PPI) and the number of US initial jobless claims last week.

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