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Gold prices declined as attention turns to Powell's speech

08 Nov,2023
Gold prices declined as attention turns to Powell's speech

Although gold prices barely moved on Wednesday, they had suffered significant losses during the previous two days as a result of hawkish remarks made by Federal Reserve officials, which caused traders to reevaluate their prospects for additional rate hikes.

Spot gold slipped by 0.1% to $1,967.78 per ounce, meanwhile gold futures steadied at $1,973.85 per ounce.

This brought attention to Fed Chair Jerome Powell's impending speech, since the markets interpreted his remarks from a meeting last week as being a little less hawkish.

Following the Fed meeting and a less-than-expected nonfarm payrolls number, which raised expectations for an end to the central bank's rate-hike cycle, gold experienced some gains in the previous week.

However, a number of Fed members toned down hopes for a pause, pointing out that more hikes are necessary given the robust economy and persistent inflation.

Since that investing in gold has a lower opportunity cost when interest rates are higher, this has a negative impact on the gold forecast.

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