Gold briefly exceeds $2,000 again for the first time in a year. Market’s expectations with respect to the Fed’s monetary policy are set to drive the yellow metal price action, economists at Commerzbank report.

Gold to rise towards $2,000 again if Powell fails to dampen rate cut expectations

“The gold ETFs tracked by Bloomberg registered inflows of just shy of 22 tons last week. The majority of last week’s inflows were registered in the world’s largest and most liquid gold ETF in the US, which is the preferred choice of professional investors.”

“What statements the Fed makes in its communiqué tomorrow about its future monetary policy, and what Fed Chair Powell says in the subsequent press conference about the interest rate outlook, are likely to play a key role. If they manage to dampen rate cut expectations, Gold is likely to fall. Otherwise, another rise towards the $2,000 mark is on the cards.”

See – Fed: Banks Preview, no pause yet, going ahead with 25 bps hike