Just ahead of the final FOMC meeting in 2022, Gold Futures briefly traded where they began the year above $1830 per ounce on Monday. But after the Federal Reserve increased their target interest rate by 50 basis points on Wednesday, while flagging a higher peak rate in 2023, the gold price slipped back below $1800 during the following Comex session.
NBC's Brian Cheung noted in his question to Powell, the Fed's unemployment forecasts suggest some 1.6 million Americans are going to lose their jobs in the next year. Powell’s answer included a response that gave a strong indication of a coming recession. As expected, the Bank of England raised interest rates by 50 basis points to 3.50% on Thursday. The central bank said that a big risk to inflation remains the labor market and could prompt more tightening. “The labour market remains tight and there has been evidence of inflationary pressures in domestic prices and wages that could indicate greater persistence and thus justifies a further forceful monetary policy response,” the BoE said in its monetary policy statement.
Taken collectively, the risk off atmosphere in the marketplace generated by this information yesterday became too much for short-term overbought Gold Futures to remain firm, taking the price of bullion back down into its $50 trading range towards support at $1780.
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