Gold faces pressure with traders becoming unsecure after Fed Waller's comments

LONDON (January 17) Gold’s price (XAU/USD) faces some selling pressure while staying above the $2,700 level on Friday, with some profit-taking occurring after its three-day rally this week.  Federal Reserve (Fed) governor Christopher Waller spooked traders by commenting on Thursday that a March interest rate cut should not be ruled out. That triggered uncertainty among traders because markets were not pricing in a March rate cut at all.

Concerns are now swelling, with traders questioning whether they might have missed an important element or whether a knee-jerk reaction could occur once President-elect Donald Trump takes office on Monday. A large number of executive orders are set to be released by Trump’s administration, including quite a few that guarantee a surge in inflation. 

Daily digest market movers: Too dovish 

• Gold set a series of record highs last year as the Fed pivoted toward interest rate cuts, the world’s major central banks bought up the precious metal, and heightened tensions drove haven demand. The metal will rise to new peaks later this year on trade and geopolitical uncertainties, UBS Group AG said this week, Bloomberg reports. 
• At 20:30 GMT, the Commodity Futures Trading Commission (CFTC) will release its weekly Commitment of Traders (COT) report. The report provides information on the size and direction of the positions taken across all maturities by participants primarily based in Chicago and New York futures markets in "non-commercial" or speculative positions. No forecast is available, but the release last Friday showed a jump to $254.9K, up from $247.3K the previous week. 
• The US 10-year yield trades around 4.596%, over 4.5% lower than its weekly peak of 4.807% seen on Tuesday.

FXStreet