Gold price analysis: Slowing Fed hikes to push gold above $1,800?

NEW YORK (Nov 24) Gold prices rose above $1,750/oz again after the publication of November FOMC minutes. The minutes presented a more dovish surprise than the market expected after Chairman Jerome Powell's November news conference, reiterating that most Fed members judged a lowering in the fed funds rate hike would be appropriate soon.

Some officials signaled that, as inflation showed no material indication of ebbing and supply and demand mismatches persisted, the potential federal funds rate needed to achieve price stability and maximum employment goals was higher than they had projected in September (4.6%). Nevertheless, it does not appear that this stance, although supported by chair Powell and the most hawkish members of the board, is garnering a broad-based consensus among the members of the Federal Reserve board.

Investors resumed repricing lower Fed interest rate increases over the upcoming months. December's 50bp hike is more likely than 75bp (44% vs 66%) and the terminal rate is expected to reach nearly 5% in May 2022.

The 10-year Treasury yield decreased once more to 3.68%, approaching the past week's lows, and the 10-year real yield decreased to 1.37%, returning to the level observed in early October. The US dollar retreated as rate expectations cooled, sending the DXY index back down below the 106 mark.

Is this a scenario that could soon cause gold prices to rise above $1,800/oz?

Capital.com