$XAU #Gold#Two Fed voting members strike a hawkish tone in succession—what’s next for gold?
Tonight, Hammack and Barkin spoke one after the other, with highly consistent messaging that leaned hawkish.
Hammack directly called for monetary policy to shift to a restrictive stance, saying inflation remains elevated and is moving in the wrong direction. She supported small, frequent rate adjustments. Barkin also said demand in the economy is solid, there are no signs of inflation easing for now, and gradual rate hikes remain reasonable.
Both are FOMC voting members this year. Making these comments on the eve of the nonfarm payrolls report appears to be a clear attempt to prepare the market: rate-cut expectations are likely to be further dampened, which would support Treasury yields and the dollar.
One interesting point, though: the market hasn’t seen a sharp one-way sell-off. That suggests investors understand that tonight’s remarks are only verbal guidance; ultimately, they’ll have to wait for tomorrow’s nonfarm payrolls data to gauge the strength of the economy.
In the short term, resistance around 4140–4150 is strengthening. If the payrolls data comes in stronger than expected again, there could be more room for gold to pull back. If prices fall further, watch support at 4086.
Don’t rush to short gold tonight just because of officials’ remarks. Volatility driven by verbal guidance tends to be limited in duration; the key event is tomorrow’s nonfarm payrolls report.
Tonight, Hammack and Barkin spoke one after the other, with highly consistent messaging that leaned hawkish.
Hammack directly called for monetary policy to shift to a restrictive stance, saying inflation remains elevated and is moving in the wrong direction. She supported small, frequent rate adjustments. Barkin also said demand in the economy is solid, there are no signs of inflation easing for now, and gradual rate hikes remain reasonable.
Both are FOMC voting members this year. Making these comments on the eve of the nonfarm payrolls report appears to be a clear attempt to prepare the market: rate-cut expectations are likely to be further dampened, which would support Treasury yields and the dollar.
One interesting point, though: the market hasn’t seen a sharp one-way sell-off. That suggests investors understand that tonight’s remarks are only verbal guidance; ultimately, they’ll have to wait for tomorrow’s nonfarm payrolls data to gauge the strength of the economy.
In the short term, resistance around 4140–4150 is strengthening. If the payrolls data comes in stronger than expected again, there could be more room for gold to pull back. If prices fall further, watch support at 4086.
Don’t rush to short gold tonight just because of officials’ remarks. Volatility driven by verbal guidance tends to be limited in duration; the key event is tomorrow’s nonfarm payrolls report.
