As the Federal Reserve maintains its neutral monetary policy stance despite acknowledging slowing economic growth, the gold market is attempting to reclaim the $3,300 per ounce mark.
As expected, the Fed kept interest rates unchanged, maintaining them within a range of 4.25% to 4.50%. The most notable change in the Fed's monetary policy statement was a slight downward revision of its assessment of the economy, noting that growth in the first half of the year slowed from the "solid pace" seen in June.
In its monetary policy statement, the Fed stated: "While volatility in net exports continues to impact the data, recent indicators suggest that the growth of economic activity has moderated somewhat in the first half of the year."
The market's initial reaction to the Fed's statement was renewed volatility in gold prices. On Wednesday (July 30), spot gold closed at $3,274.88, down $51.47, or 1.55%, with an intraday low of $3,268.02. In early Asian trading on Thursday, spot gold rebounded to around $3,296, putting it within reach of the previous support level of $3,300.
While the Federal Reserve maintained its neutral monetary policy stance, dissent began to emerge within the committee. Fed Governors Bowman and Waller both voted in favor of a rate cut at this meeting.
However, analysts noted that the split vote was unsurprising, as both committee members had been outspoken about their dovish views.
With the Fed's decision unsurprising, Michael Brown, senior market analyst at Pepperstone, predicts the Fed will be slightly more hawkish this year than the market currently anticipates.
Despite the Fed's current neutral stance, the market still expects the Fed to cut interest rates twice this year, starting as early as September.
"My baseline forecast remains that the resilient nature of the labor market and continued tariff-induced price pressures will keep the Fed on the sidelines for now," Brown said. "My view remains that only one 25 basis point rate cut is likely this year, likely at the December meeting."
XAUUSD GOLD XAUUSD GOLD XAUUSD
As expected, the Fed kept interest rates unchanged, maintaining them within a range of 4.25% to 4.50%. The most notable change in the Fed's monetary policy statement was a slight downward revision of its assessment of the economy, noting that growth in the first half of the year slowed from the "solid pace" seen in June.
In its monetary policy statement, the Fed stated: "While volatility in net exports continues to impact the data, recent indicators suggest that the growth of economic activity has moderated somewhat in the first half of the year."
The market's initial reaction to the Fed's statement was renewed volatility in gold prices. On Wednesday (July 30), spot gold closed at $3,274.88, down $51.47, or 1.55%, with an intraday low of $3,268.02. In early Asian trading on Thursday, spot gold rebounded to around $3,296, putting it within reach of the previous support level of $3,300.
While the Federal Reserve maintained its neutral monetary policy stance, dissent began to emerge within the committee. Fed Governors Bowman and Waller both voted in favor of a rate cut at this meeting.
However, analysts noted that the split vote was unsurprising, as both committee members had been outspoken about their dovish views.
With the Fed's decision unsurprising, Michael Brown, senior market analyst at Pepperstone, predicts the Fed will be slightly more hawkish this year than the market currently anticipates.
Despite the Fed's current neutral stance, the market still expects the Fed to cut interest rates twice this year, starting as early as September.
"My baseline forecast remains that the resilient nature of the labor market and continued tariff-induced price pressures will keep the Fed on the sidelines for now," Brown said. "My view remains that only one 25 basis point rate cut is likely this year, likely at the December meeting."
XAUUSD GOLD XAUUSD GOLD XAUUSD 
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Real-time strategies are like a beacon guiding your investment path. The market will never disappoint those who persevere and explore wisely....🚀🚀VIP Channel t.me/EagleEyePrecisionAnalysis
👉Exclusive address t.me/Eagle_PreciseAnalysis
👉Exclusive address t.me/Eagle_PreciseAnalysis
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.