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Gold Gains After Fed’s Dovish Hike Reinforces Bullish Trend, Breakout in Play

March 23, 2023

Via: DailyFX

Gold prices surged on Thursday amid U.S. dollar weakness after the FOMC delivered a dovish interest rate hike and signaled that its tightening campaign may be nearing its end. In late morning trading, XAU/USD was rallying about 1% to $1,986, inching ever closer to its 2023 highs, just above the psychological $2,000 level set this past Monday.

Recent banking sector turmoil has led the Fed to adopt a much more cautious stance and to project a less aggressive hiking cycle than telegraphed just a few weeks ago, when Powell dropped a hawkish bombshell before Congress. In fact, the FOMC only expects to raise borrowing costs one final time this year to 5.00-5.25%, well below the 5.70% peak rate anticipated by the market earlier this month.

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