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Gold Price Forecast: XAU/USD Extends Drawback Ahead of FOMC

November 21, 2022

Via: DailyFX

Gold is tracking lower this morning on the back of a stronger USD stemming from the build up of relatively hawkish comments from Fed speakers. Although some reiterated the moderation of interest rate hikes going forward, the expectation remains aggressive with peak rates priced in at just over 5% in June next year (see table below).

After recent optimism around an easing of China’s COVID restrictions, we have seen a recent uptick in COVID cases in certain regions which has quickly reignited the possibility of renewed limitations. From the demand side, China is the worlds largest buyer of gold and question marks about COVID policies will likely dent demand forecasts leaving spot gold vulnerable to additional downside.

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