Gold approaches record highs following Fed decision
The hint from the Federal Reserve that it has now concluded raising US interest rates after increasing rates at the most aggressive pace in close to a generation over the last year has lifted Gold prices near record-high levels during the early hours of Thursday trade.
Central banks have also raised interest rates at such an aggressive extent that the impact is going to take time to filter into economic data. We might not begin to see the impact until the second half of 2023 and by that time, if inflationary pressures do ease, subsequent expectations will then emerge that central banks will need to consider cutting interest rates.
The ECB is already well behind other central banks when it comes to the interest rate increase cycle that is taking place worldwide, and it might want to push the pace faster and provide a more aggressive stance to avoid being left behind the pack later when the likes of the Fed signal that it could start lowering interest rates.
From the technical side of the charts, 1.10 in the Eurodollar is proving to be significant in terms of preventing a further advance. However, the moves in recent trading sessions in Gold provides hope that barriers are there to be broken.Let us also not forget that while the various central bank meetings taking place this week are dominating attention, Friday will see the latest monthly employment report released by the United States.
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