Gold extended its losing streak on Thursday, falling to its weakest point in multiple weeks as interest rate expectations continued to shift toward fewer rate cuts.
The Federal Reserve kept its interest rates unchanged as inflationary concerns continue to be fuelled by rising oil prices.
With forecasts now pricing out near-term easing entirely, pushing the first expected cut until next year, yields have firmed, eroding gold’s appeal as a non-yielding asset.
Looking ahead, gold’s near-term trajectory could remain weighed down by the current inflationary concerns. In this regard, the market could remain exposed to the developments in the Middle East and their impact on energy prices.
The current limited visibility for an off-ramp for the tensions in the region could continue to put pressure on gold. New economic data could also affect the metal to a certain extent if monetary policy views change drastically. Today’s jobless claims data could shed some light on the state of the job market, although its impact could be limited under current conditions.
