Gold price dropped to over two-week lows on Thursday, with bears now eyeing a move towards challenging the key $1400 psychological mark.
1 August 2019, GKFX – The precious metal remained under some selling pressure for the second consecutive session on Thursday and added to the previous session’s heavy losses, which came after the Fed lowered its benchmark interest rate by 25 bps but signaled that more rate cuts are not guaranteed.
Gold price fundamental highlights
In the post-meeting press conference, the Fed Chair Jerome Powell described the rate cut as a mid-cycle adjustment of policy and said that the move does not necessarily mean the beginning of a series of rate cuts and prompted some aggressive selling around the non-yielding yellow metal.
Meanwhile, the Fed’s hawkish cut triggered a fresh leg of an upsurge in the US Dollar, which extended through the early European session on Thursday and further collaborated towards driving flows away from the dollar-denominated commodity.
However, given the fact that the US-China trade negotiations concluded without a major breakthrough, a slight deterioration in the global risk sentiment extended some support to the precious metal’s safe-haven status and might turn out to be the only factors that might help limit deeper losses.
Moving ahead, Thursday’s US economic docket – highlighting the release of ISM manufacturing PMI, will now be looked upon for some short-term trading impetus later during the early North-American session and ahead of Friday’s closely watched US monthly jobs report (NFP).
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