Gold retraces gains, nears 2-month lows at $4,104

Gold retraced the previous day’s gains on Wednesday and resumed its broader bearish trend, with the US dollar appreciating across the board, as investors brace for the release of the minutes of the latest Federal Reserve meeting.

The XAUUSD pair trades below $4,120 after retreating from the $4,180 area on Tuesday, drifting closer to the two-month low at $4,104.

The DXY Dollar Index, which measures the value of the greenback against a basket of six majors, has retraced previous losses as investors grow wary of selling the USD ahead of the FOMC minutes’ release.

Beyond that, crude oil prices have bounced up amid news of fresh tensions in the Middle East, setting some of the main dollar peers, namely the Euro, under pressure.

The Fed hiked rates by 25 basis points, bringing the fed funds rate to the 3.75-4% range at the September meeting, and Chair Kevin Warsh surprised with an unequivocal hawkish message.

Hopes of another interest rate hike in October, however, have faded amid soft inflation and employment reports and mixed comments by policymakers. That said, markets remain confident that the bank will hike rates again in December and at least one more time in early 2027.

(Source: OANDA)

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