Gold prices drop 2.3% after Fed rate cut and hawkish guidance, strong USD.

From Investing.com: 2024-12-19 01:54:00

Gold prices fell by 2.3% after the Fed cut interest rates and indicated a pause in future reductions due to high inflation. The USD strengthened against major currencies as the Fed plans only two 25-basis-point rate cuts by the end of 2025. XAU/USD regained 1.2% but remains in a bearish trend awaiting the US Initial Jobless Claims report for further direction.

The euro dropped by 1.31% against the USD after the Fed signaled a slower pace of future rate cuts, with a bearish trend reemerging targeting 1.02950. EUR/USD slightly rose but remains bearish, with investors expecting a rate cut by the Fed and ECB. US macroeconomic releases today will impact the pair’s movement.

The Canadian dollar hit a near-five-year low against the USD due to the Fed’s hawkish guidance, with the USD surging against major currencies. Domestic political instability and US trade tariffs have added to the challenges facing the Canadian dollar. Implied volatility for the CAD has reached its highest since April 2023. USD/CAD is near the 1.44300 support level, with the US Jobless Claims report today potentially affecting the pair’s movement.



Read more at Investing.com: Gold Drops Sharply Following Fed Rate Cut and Hawkish Guidance