Lagos — Gold prices remained on a downward trajectory overall as traders continue to evaluate the possible outcomes of the upcoming Federal Reserve meeting.
“Higher than expected US inflation data has fueled more uncertainty about the direction of monetary policy,” Denys Peleshok, Head of Asia at CPT Markets disclosed in a market analysis.
While the Federal Reserve is anticipated to maintain interest rates unchanged in next week’s meeting, elevated inflationary pressures could leave some concerns about another hike this year.
The potential for the Federal Reserve to keep interest rates high for longer could continue to weigh on gold prices which have been declining since their peak in May this year. Current market sentiment could continue pushing traders toward bonds.
Yields on both the 2-year and the 10-year treasury bonds remain near this year’s high despite some fluctuation during the last few days.
Gold prices could continue to see some volatility during the coming days as traders react to the US economic data releases. The resilient US economy could also continue to affect the market’s direction as traders could adopt a more risk-on approach, leaving gold behind.